How the Drought Will Affect Your Bottom Dollar (And What to Do About It)

Dried cornhusks. Shriveled corncobs. Cracked patches of earth. Images from this summer’s drought—the country’s worst in 25 years—are unforgettable. This summer’s onslaught of extreme 100 degree temperatures and brutal rain-free conditions has wreaked havoc on the country’s heartland. In total, the U.S. Department of Agriculture (USDA) has designated 1,892 counties in 32 states as disaster areas, as a result of the drought. And now, despite the recent drenching in some states by Hurricane Isaac, the devastated wheat, corn, and soybean crops are likely to ravage your household budget as food costs creep upwards.

As of now, only commodity prices have hit record highs.  In just one month’s time this summer, the price of corn and wheat jumped 25 percent, and the price of soybeans climbed 17 percent, as reported by the World Bank. A large portion of these crops is used to feed livestock—so beef, pork, and poultry producers currently are the ones feeling the pinch. Because of high grain prices, farmers are choosing to slaughter their herds early instead of paying for feed to fatten them. According to data examined by Reuters, 9.9 million hogs were slaughtered in August, a record for that month.

On the home front, you’re correct if you think your grocery bill has increased in the past year. The Consumer Price Index found that, from 2011 to 2012, the cost of beef has gone up by 6.6 percent, chicken is 5.5 percent more expensive, and both bread and cereal are costing 3.2 percent more. The cause of these upticks? Normal food price inflation—not the drought.

Price increases because of the hot temperatures and dry conditions have yet to hit grocery store shelves. But that’s about to change. The U.S. Department of Agriculture (USDA) states that consumers “will likely see impacts within two months for beef, pork, poultry and dairy…The full effects of the increase in corn prices for packaged and processed foods (cereal, corn flour, etc.) will likely take 10-12 months to move through retail food prices.” The USDA stresses that despite this, prices shouldn’t skyrocket. “Even if all the commodity prices doubled, retail food prices would increase by no more than 15 percent.” Ultimately, it’s likely that consumers will see price hikes around 4 percent.

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Still, if you have a tight budget with not much room to spare, any uptick in cost is tough to manage. Implementing these four easy-to-follow strategies, though, can help minimize the drought’s effect on your pocketbook.

Stick to a shopping list.

Plan your meals in advance and you’ll be less likely to pick up impulse buys while shopping. The free app Grocery IQ allows you to save frequently purchased items, plus it recommends coupons for items on your list.

Be aware of marketing tricks.

Those products shelved at eye-level? They’re placed in that location because they’re more expensive than other items. So look high and low for more reasonably priced groceries—including store brand products, which can be just as tasty as their costly name-brand counterparts. And don’t assume that the packaged foods and beverages located on end caps are discounted, either. According to Consumer Reports, placing a product at aisle entrances increases its sales by a third—making this a desired location for stores to place full-priced merch that they’re looking to get rid of.

Go meatless (once a week).

Eating a vegetarian meal once a week is not only healthy and good for the environment, but with meat prices on the rise, doing so will also help you lower your grocery bill. Check out the vegetarian section of for family-friendly meat-free recipes.

Buy in bulk.

Granted, you can’t do this with produce (who’s really going to eat 10 pounds of strawberries?), but you can save big by packing your freezer with beef, chicken, pork, and fish from your local Costco or Sam’s Club. And while you’re there, pick up nonperishables like rice and pasta on the cheap, too. You’ll be able to fill up your pantry without emptying out your wallet.


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