A TIP OF THE HAT TO THE WALL STREET JOURNAL
Maybe, just maybe, mainstream journalists are also tired of the sensationalism surrounding the story of the 2012 drought. Case in point is this blog from the Wall Street Journal. The blog’s author does a little math and concludes that despite the devastating impact of the drought at the farm level, the impact the consumer will feel in terms of food prices will be just above the normal increase due to inflation. Please ignore the urge to say, “I told you so.”
The writer makes his point here:
“Americans, on average, will spend an additional $32.76 on food next year than they would have if the drought had not occurred, according to our back-of-the envelope calculations. That comes out to $2.73 a month.”
Now we’re not saying that an extra $2.73 a month won’t put some people in a bind, but that number does put some perspective on the issue.
For more information about the drought, corn prices, and food prices, check out this IL Corn fact sheet on the issue.
Corn prices are reaching historic highs, that’s for sure. Time will tell what harvest will bring and what the market’s reaction will be. The August 10 report from USDA will be an interesting one to watch.