Drought and increased food prices not just affecting consumers

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MILWAUKEE -- This summer's drought will likely mean an increase in food prices. The USDA says consumers can expect to pay more for things like beef, poultry and milk due to what's been called the worst drought in 50 years in the Midwest.

The U.S. Department of Agriculture said Wednesday, July 25th that meat prices would rise significantly, with the consumer price index for beef and veal expected to gain between 3.5% and 4.5% this year.

Scorching heat has caused crops to wilt, sending feed prices higher and prompting many ranchers to reduce their herds.

Prices are up nearly 50% over the past three months for corn, and soybean prices have also been on the rise, gaining 25% since early June.

Last week, Secretary of Agriculture Tom Vilsack said 78% of this year's corn crop was in drought-impacted areas, and 77% of the soybean crop was being threatened.

Poultry prices will be the first to feel the effects of the drought. The USDA is forecasting a 3.5% to 4.5% jump in chicken and turkey prices this year.

Consumers can expect to pay more for cheese and milk, with dairy prices headed for a 2% to 3% increase. Eggs will also be impacted, though prices are only forecast to rise 1% to 2% this year.

Consumers can expect to pay more for cooking oil and vegetable oil this year, since soybeans are the main ingredient. The USDA is forecasting a rise of 4% to 5% for fats and oils.

The USDA has declared 1,369 counties across 31 states as disaster areas this year.

Jeff Zupan with Bunzel's Meat and Catering says he predicts higher meat prices in the upcoming months, but says due to the drought's impact on farmers' feed for livestock, Bunzel's has actually seen an influx of meat.

"A lot of them have taken their cattle and put them to slaughter because they can`t feed them -- trying to cut back on their herd," Zupan said.

Zupan says he predicts next year there will be a smaller herd, and consumers will be forced to deal with increased prices.

"It`s going to be smaller herd and less amount of cattle going into the food chain so it`s going to impact everybody," Zupan said.

Zupan says because Bunzel's buys locally, they will feel the pinch faster than consumers.

"We like to go with local growers because we know what they feed. We`re affected greatly by the market. For somebody like us -- a smaller market, we refuse to put anything inferior, so we have to play everything tight and watch what we put in because I`m not going to compromise quality," Zupan said.

Zupan said he'll try to lessen the trickle-down effect, but because of such a devastating drought, there's only so much he can do.

"The cost is going up for everybody across the board," Zupan said.

Zupan said he advises customers to buy in bulk. If stored and frozen properly, food can last for a few months.

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