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US drought pushes up food prices

Summary

30 July 2012

The US is bracing itself for higher food prices next year as a record drought continues to plague farmers in many parts of the country. The US Department of Agriculture says the cost of beef and dairy products are likely to rise 1% higher than the normal rate of inflation.

Reporter:

Jane O'Brien

Report

The drought affecting large parts of the Midwest has withered corn and soybeans in the fields. Those are the staple crops most commonly used to feed animals. As a result, beef, pork and dairy prices are expected to jump next year - but fruit and vegetables will not be affected because those crops are usually irrigated. The department of Agriculture had been predicting a bumper year for corn, but didn't realise how bad the drought would get when it made its food price projections last month. Other countries will also be affected, because US food exports have jumped dramatically in the past few years.