Midwest drought's impacts seen in fourth quarter 2012 food prices

In the final three months of 2012, higher field corn prices resulting from the Midwest drought began to show up on supermarket shelves. From October to December, while the all-items CPI fell 0.8 percent and overall food-at-home prices increased only 0.2 percent, prices rose for most foods that rely heavily on corn-based animal feed—beef, pork, poultry, other meats, eggs, and dairy products. Milk prices rose nearly 3 percent while egg prices increased 1.7 percent. Prices for beef, poultry, and other meats all rose by about 0.5 percent. The only animal-based category defying this trend is pork, where rising inventories and falling exports have caused retail prices to drop from historically high levels in early 2012. ERS forecasts prices for all meat and animal-based products to increase steadily through the first half of 2013. More information on food price changes and forecasts can be found in the Food Price Outlook data product, updated January 2013.

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