Food Prices Going Up, Experts Say

The next time you go grocery shopping, your wallet could be in for an unpleasant surprise. 

According to a pair of new reports from the USDA, crop yields for corn and soybeans are expected to fall due to the intense drought and flooding that has plagued much of the nation, translating into higher prices at the checkout counter.

Not surprisingly, the news also led to a jump in trading prices for the crops as experts anticipated the diminishing supply going into 2012.

As reported by The New York Times:

“The message, based on today’s report, is these higher costs should not be expected to abate any time soon,” said Bill G. Lapp, president of Advanced Economic Solutions, a commodity consulting firm that works with restaurant companies and food manufacturers. “It implies higher cost forthcoming and subsequent margin pressure, and at some point the need to increase prices at the retail level or on the menus.”

The Agriculture Department’s production and supply and demand reports, including information from a survey of farmers and visits to fields, predicted a national average corn yield of 153 bushels an acre, down from nearly 159 bushels in the government’s previous forecast. The department also predicted a small drop in the number of acres of corn that would be harvested this fall.

So what does this mean for consumers? Higher prices on corn, soybeans, pasta, and vegetable oil, for starters. Meat prices will also rise as the elevated cost of feed (made mostly of corn and soy) will result into fewer animals being raised. 

Looks like now's a good time to stock up for the winter. 

Read the full story over at the NYT.