If you’re waiting for food prices to start to come down, I have some bad news for you. The way conditions look right now food prices are probably going to keep going up for a while, and it isn’t just the Ukraine crisis that’s driving it. It’s the drought.
Unless you’re directly affected by water shortages out west you may not even know it, but the US is in the middle of one of the worst droughts in memory, with about 65% of the country experiencing drought conditions. Look at that map up there, just about the entire western half of the country is under drought conditions.
In the last few weeks the commodities market price for wheat has almost doubled, jumping from a bit over $7 up to $13.40 a bushel as of this morning.
Part of this is due to the situation in Ukraine of course, but much of it is because of weather issues. Corn and soybeans haven’t been hit quite as hard but they are up as well.
The drought situation is going to hit the cattle markets as well. With everything as dry as it is out west that means that grass for grazing cattle is in short supply and feed costs are going to be going up.