About food prices…

The media has somehow found out that we’re in a major drought.  (They’ll have to get out more)  And that means food production is going down and prices are going up…particularly the price of corn.

One article we read has some interesting insight: primarily that since the cost of producing food makes up only a small percentage of the price you actually pay at the market, your grocery bill may only go up about 1%.  The notable exception, glossed over in this article, is conventional beef.  Corn makes up a big part of the cost of raising Big Ag’s beef.

Typically, the price you pay for most things is for the packaging, marketing, transportation, not the product itself.  There are lots of ways they hide the various parts of a chicken in packages but beef is more difficult to “differentiate’ as a product.  So it’s harder to do much more than triple the price the farmer gets.  (Sarcasm intended)

Before going any farther, you may want to read the article for yourself.

http://blogs.smartmoney.com/advice/2012/07/18/rising-corn-prices-and-your-grocery-bill/

So you can expect some prices to go up more than others.  Heavily dependent on corn as a production cost, regular beef prices are bound to go up.  The prospect is even grimmer than the simple cost of corn.  Cattle herds, which have been shrinking in recent years, are now being abandoned completely.  That reduction in supply will also spell higher prices at the supermarket.

There’s more to be said, and I will, but for now….yes, prices are going up but, behind the scenes, the farmer once again is being hurt more than any of us.