Drought not Responsible for High Food Costs
By: Scott Anderson, BrownwoodNews.com
Updated: August 28, 2012
The truth is livestock and crop prices only make up about 14 percent of the total food cost to the consumer, according to USDA figures.
Forecasts show about a 3 percent increase this year and next about average. And, even if the price of crops doubled, we would only pay about 14 percent more for our food.
So where does 86 percent of the food cost go? That "everything else" category affects food prices more than six times as much as commodity prices. Fuel, transportation and energy costs are nearly half of the shelf price. Packaging, marketing and other steps in the chain make up a good chunk of the rest.
The bottom line is food price increases can't be blamed on the drought for now. Yes, we will eventually see an increase from shorter supply of corn, soybeans, beef and other agricultural products.
But many believe these increases won't be felt until early next year.
