Food prices are on the rise and the government expects prices to rise an additional 3 to 4% next year which surpasses the rate of inflation.
You may be surprised to know that the rate hike is not directly correlated to high oil prices, but this year's weather pattern. So far, this has been the worst drought in nearly half a century, which has taken its toll on many crops.
"There's no question that weather is one of the key factors that have impacted our supply," said United Supermarkets spokesman Eddie Owens. Corn in particular has been a crop in very high demand.
It is used in the form of corn syrup in various processed foods and serves as a main ingredient in animal feed. Owens explains that a high demand for corn means a possible impact to the beef industry.
"Our cattle raisers cannot afford to pay for the feed that's in short supply because of the weather," said Owens. "It has not been conducive to growing the grain primarily soybeans and corn."
The need for corn goes beyond the dinner table and into your gas pump. "The government mandated that so many million gallons of ethanol be used in gasoline," said Charles Bolton, Bolton Oil Company co-owner. "So around the Lubbock area, there aren't too many places you can buy ordinary unleaded gasoline."
According to the mandate, gasoline is comprised of at least 10% ethanol. This continues to keep the demand high on farmers, as they try to raise that golden crop in harsh conditions.
Since the price of food and gasoline is not necessarily in the hands of the consumer, the ultimate factor is to shop smarter. In addition to utilizing weekly coupon ads and to purchase certain foods in bulk, Owens suggests keeping your eye on the unit price, which prices an item according to its cost and weight.
"That's really where you can save the money," said Owens.
Congress refused to pass the Farm Bill until after the November election, which raises questions for many farmers, especially since several disaster relief programs expired November 2011. The legislation, however, does not cite any specific drought assistance. The bill is projected to cost $1 trillion.
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