Last week reports showed that the price of peanut butter would nearly double because of the drought producers have been hit with.
However there may not be a direct correlation between drought effects and retail prices.
"Our commodity prices are not the only sole driver of what causes our food prices to be higher in the grocery store," explained Taylor County Extension Agent, Robert Pritz.
Higher costs of fuel, maintenance and production of goods has increased commodity prices more than anything. It's what needed for the producers to have any kind of profit from production. However most of those higher costs are absorbed along the way, sometimes well before they hit the shelves.
Pritz said, "The effect that we're going to see in the grocery store depends on how highly processed the product becomes by the time it gets to our grocery stores."
The processing of products like wheat into goods like Twinkies serve as somewhat of a buffer from the high commodity prices to the prices on the shelves.
"Our commodity prices still play a relatively small role in the change of price that our consumer sees in the grocery store," Pritz added.
So when the cost of things like peanut butter goes up, remember, we can't directly correlate that to the drought, but more so to generally higher production costs.
Analysts say that commodity prices will eventually even out and drop again, but that doesn't necessarily mean that the retail prices will follow. The middle men in production sometimes can control those prices however they see fit.
However there may not be a direct correlation between drought effects and retail prices.
"Our commodity prices are not the only sole driver of what causes our food prices to be higher in the grocery store," explained Taylor County Extension Agent, Robert Pritz.
Higher costs of fuel, maintenance and production of goods has increased commodity prices more than anything. It's what needed for the producers to have any kind of profit from production. However most of those higher costs are absorbed along the way, sometimes well before they hit the shelves.
Pritz said, "The effect that we're going to see in the grocery store depends on how highly processed the product becomes by the time it gets to our grocery stores."
The processing of products like wheat into goods like Twinkies serve as somewhat of a buffer from the high commodity prices to the prices on the shelves.
"Our commodity prices still play a relatively small role in the change of price that our consumer sees in the grocery store," Pritz added.
So when the cost of things like peanut butter goes up, remember, we can't directly correlate that to the drought, but more so to generally higher production costs.
Analysts say that commodity prices will eventually even out and drop again, but that doesn't necessarily mean that the retail prices will follow. The middle men in production sometimes can control those prices however they see fit.
