Crop shortfall starting to impact prices … at the grocery store and and at the pump

Punch line: Forecasts of U.S. corn and soybean yields are set to have a major impact on the prices we pay for everything from processed food to beef and poultry.

Crop forecase falls again - Image by flickr user nicora

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Excerpted from NYT.com, “Government Lowers Crop Yield Forecast Again”

The Agriculture Department  lowered its forecast of corn and soybean yields as record heat continued to batter crops in the Midwest.

The new data suggested that customers would pay more at the grocery store next year as the prices of corn and soybeans — major ingredients in processed food, animal feed and biofuels — rise to record levels.

The United States is the world’s largest exporter of corn and soybeans.

The report said exports of both crops would be substantially lower than last year, which could have a devastating effect on countries like China and Mexico, which depend heavily on American exports.

The report said beef and poultry production was expected to increase this year as livestock producers culled or sold their herds because of higher feed costs.

But prices for beef and poultry are expected to rise 4 to 5 percent next year.

Edit by JDC

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