How the Drought Will Affect Food Prices

Wondering how the drought will affect food prices? It depends on how much worse the drought gets, or so says the United States Department of Agriculture and Economic Research Service. (USDA ERS). According to their most current report, they predict the cost of eggs will rise (no surprise) but they predict that the cost of fresh fruits and vegetables will fall. That is a surprise.
Will the drought affect food prices

CPIforecast July 2015 CPI Forecast

With the massive drought making life miserable for California’s farmers (the nation’s “fruit basket”), how can prices remain stable? The answer lies in infrastructure.

Drought is certainly not a new problem for California. Most farms rely on a complex network of irrigation to keep crops watered. Right now the only affect crops are rice, cotton, hay and corn silage. These foods only have an indirect impact on the market and prices are established by the global availability – not just what is produced stateside. Because California doesn’t produce many grains, impact to grain prices will be negligible.

Crops that require a lot of water such as nuts, berries, grapes and some vegetables, actually make the farmer more money because they have such a high water content. Field crops may go without as farmers redirect water to these lucrative but hydration-hungry plants. These plants also get more attention because they’re perennials; growers see them as long-term investments and are more likely to let a harvest of annuals go. The other beneficial aspect is that produce is grown chiefly along California’s coast, where groundwater supplies remain stable.

It’s still likely that dairy and meat prices could rise, along with a continued rise in egg prices.

If the drought continues, predictions could change. Even the current predictions mean impacts to the price of staples like dairy and eggs. Owning a freeze dryer can save the average household nearly $3,000 in food costs per year, and that figure could rise along with food costs. There’s no better time to invest in a home freeze dryer and protect your budget from the impacts of the drought.