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Drought drives up food costs

Monday, November 26, 2012

If you thought the impact of the drought was over, think again. It's just about to show up on your dining room table.

The worst drought in 50 years resulted in lower corn and soybean yields, causing the price for the crop to rise. The impact: ethanol production is running 12 percent below last year because the corn is in shorter supply; and a new study by Iowa Farm Bureau sees cattle, hog and poultry producers in the state planning to trim back production plans for 2013 as higher corn prices drive up their feed costs.

The cattle market, for example, has already been thinned to the lowest number of animals since the early 1970s.

Bottom line, says Dave Miller, IFB director of research, the whammy on food prices will begin to hit consumers as early as January at the grocery stores.

Currently, meat producers are bringing their livestock to market sooner and at lighter weights to try to offset the feed costs. That will change at the first of the year, Miller says.

Lower production levels will cut into the supply, and meat/poultry product prices are expected to be the first place where prices will reflect the realities.

Shane Ellis, a specialist with the Iowa Beef Center at Iowa State University, says a cut of meat now selling for $5/pound will rise to about $5.50 short-term.

But grains, cheeses, milk and all those thousands of products that depend upon the bounty of the soil will also become more expensive to produce as well, at least for a year.

The U.S Department of Agriculture is predicting the overall cost of groceries will jump about 4 percent, but costs for some staples will shoot up must more steeply.

Veteran farmer in the region, Gordon Wassenaar, figured the drought last summer cost him about 40 percent of his potential yield. "It's not that we're gonna go out of business overnight," he said in a CBS report. "But what we're worried about is next year. We've got to get some moisture."

In Iowa alone, the corn harvest is an estimated 32 bushels per acre lower than 2011 - and Iowa accounts for nearly a fifth of the country's total supply.

Impact of the lean Iowa yields ricochet around the world's export markets, from South America to China. The drought in the U.S. is not the only one - dry conditions in Russia and much of eastern Europe, as well as Australia, has cut production in some of the world's most important wheat-producing regions.

The last time major portions of the world saw drought, 2008, hunger and social unrest led to bread riots in some 30 countries. A smaller price spike in 2010 helped set the stage for Arab uprisings that are still reworking the politics of the Middle East.

While grocery riots aren't a threat in Storm Lake, times are becoming tough, and more people seem to need helping stretching grocery dollars, says Marasol Vergen-Axtell, nutrition program leader with the Iowa State University Extension in Buena Vista County.

For many, a saving grace has been the food distribution events now held on Mondays at Storm Lake United Methodist Church by The Bridge, she said.

"They are standing in line for food, but they people really need and appreciate what they receive in these economic conditions. When there's nothing left in your pocket, a little food means a lot," Marisol said.

As a teacher of family nutrition classes, she has advise for people struggling with rising grocery bills. Her mantra: "Plan, stop and save."

* Always make a list before going to the store, to avoid running up your bill with impulse buys. Try not to shop for groceries when you are hungry, and stay out of the aisles with things not on your list.

* Don't shop daily. A routine of shopping once a week or once every two weeks will likely use your money more efficiently.

* Use the weekly fliers in the newspaper and shopper, and take them all with you to the store. What most people don't realize is that local groceries HyVee, Fareway and Walmart will accept most coupons (except for their own house brands) from the other stores. With a little planning, people can get more food for their dollar and avoid burning gas to drive around to multiple stores.

* Packaging and portion sizes can be deceiving. Calculate the price of your purchases per ounce of food to know exactly what kind of deal you are getting.

* Try to buy food in season. If fresh is outside the budget, price frozen and canned produce - usually the nutrition is the same.

* Stock up. Canned goods have a long shelf life - when you run into a good sale, buy a little extra to save for later.

* Be aware of your waste - many people throw away a quarter of their food investment. Look for recipes that can make use of the items you commonly throw away. A handful of leftover cereal at the bottom of the box can make a whole grain bar with a simple recipe.

"In our classes, we teach people to throw nothing away. We do a hands-on recipe with a few simple ingredients that would otherwise probably end up as garbage. They are always reluctant to taste them, because people today just aren't geared to think this way, but when they do taste it, they are surprised what they can do so simply," Marisol said.

"If you have a cup and a half of chicken left over from another meal, an apple, a stalk of celery and a little light ranch dressing, you mix it up with a dash of pepper and a few nuts if you like, and people will be surprised how good it is."

* More ideas for saving on food are available from www.extension.iastate.edu/foodsavings/ ISU Extension also offers help hotlines that can assist people with budget counseling and how to talk to their children about tough economic times.

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