To the consternation of just about everyone, global food prices are steadily rising due to a myriad of factors including a U.S. drought that's reportedly becoming one of the worst in American history, comparable to the devastating Dust Bowl of the 1930s.
For Canadians, that means we can expect to start paying higher prices for food in the coming months including some staple items many of us may take for granted. CIBC notes in a recently release report the impact of the drought has already hit corn and soybean yields and it's also pushing wheat and barley prices higher (beer drinkers everywhere just got nervous). And a spike in food prices will have a ripple effect on other parts of the economy, that bank's chief economist says.
Are alarm bells ringing in your head yet? Wait, there's more:
The drought parching American farmers is also impacting Central and Eastern Canada, in-turn kindling fears of a food crisis or shortage. This summer has seen record-setting high temperatures across Ontario, Quebec and the Atlantic provinces coupled with some of the lowest rainfall on record.
Generally, thanks to inflation, everything you purchase should rise by about 3 per cent per year, as historically that's the average. But food prices are expected to grow by 2.5 per cent to 4 per cent in 2013 as a result of the current drought and it'll inflate the cost of everything from pork to your favourite breakfast cereal, predicts RBC.
On a more hopeful note, the U.S. Agriculture Department predicted last spring the U.S. would produce its biggest harvest of corn this autumn since 1937, enough to meet global demand and ensure there will be no shortages. As the U.S. and Canada are the world's No. 2 and 5 soybean exporters, respectively, and Nos. 1 and 3 for wheat, fingers are crossed the prediction holds true.
But while corn prices have already risen, some experts expect the greatest impact will be on meat and poultry prices come 2013. A professor of agricultural economics at Illinois State University expects pork and beef prices to rise by as much as a 4 per cent to 6 per cent.
The time to stockpile your bunker is now.