BUSINESS

US says drought will push up food prices 3 per cent to 4 per cent in 2013

07/25/2012 01:47 EDT | Updated 09/24/2012 05:12 EDT
MINNEAPOLIS - The U.S. government is projecting the record drought gripping half the country will help push food prices up by 3 per cent to 4 per cent next year.

Figures released by the Department of Agriculture on Wednesday show that beef prices are expected to see the biggest jump at 4 per cent to 5 per cent.

Dairy product prices are expected to climb 3.5 per cent to 4.5 per cent. Poultry prices are expected to rise 3 per cent to 4 per cent.

USDA economist Richard Volpe says these are the agency's first food price projections to factor in the drought.

Corn, soybean and other commodity prices are soaring.

Meat and poultry are the most affected because feed prices represent the biggest part of their cost of production. Processed food prices are less affected.