The record drought afflicting half the United States will increase food prices by 3 to 4 percent next year, the U.S. Department of Agriculture (USDA) predicted Wednesday. Milk, eggs, beef, and poultry prices will be affected by the drought, which has raised prices for animal feed. Beef prices are expected to see the biggest jump of up to 5 percent. Dairy-product prices are forecast to climb 3.5 to 4.5 percent, and poultry and egg prices are projected to rise 3 to 4 percent, the USDA said. “In 2013, as a result of this drought, we are looking at above-normal food-price inflation," USDA economist Richard Volpe said. “Consumers are certainly going to feel it." Normal annual grocery-price inflation is about 2.8 percent, Volpe said. The USDA kept its projected food-price increase for 2012 steady at 2.5 percent to 3.5 percent. The figures are the department's first price projections to factor in the drought, though farmers and analysts have been warning that prices will rise. The drought has sent corn, soybean, and other commodity prices soaring in recent weeks as fields dry and crops die across much of the central United States. “This drought was a surprise for everybody," Volpe said. “The USDA was forecasting a record year for the corn crop until this drought materialized. Now we're not going to get that." Volpe said the drought is not expected to affect prices for fruits and vegetables, most of which are irrigated. -
