![]() ![]() ![]() While the majority of those specialty crops are holding up, one of the hardest-hit crops in California has been rice, according to Aaron Smith, UC Davis’ DeLoach professor of agricultural economics. “Drought conditions in the US also risk global access to some items like almonds, since California produces 80% of the world’s supply.” The drought and its effects “will likely result in American consumers paying more for these goods and either partially relying on foreign supplies or shrinking the diversity of items they buy at the store,” according to the Farm Bureau. The overwhelming majority of fruits, tree nuts and vegetables are sourced from drought-stricken states such as California and Texas, the American Farm Bureau Federation noted in a recent market update. “And those higher costs are being passed on to consumers.” The rise in food prices is one of the key factors fueling inflation, according to recent CPI data. ![]() “When you’ve put all that together, farmers and ranchers have experienced extraordinary cost pressures,” Dougherty said. David Paul Morris/Bloomberg/Getty ImagesĪmerican farmers are killing their own crops and selling cows because of extreme drought Drought and water shortages are hurting processing tomato production in a region responsible for a quarter of the worlds output, with the squeeze set to exacerbate already elevated prices for tomato-based goods. The high heat and drought have only compounded the issues facing American farmers, including supply chain ripple effects from Russia’s war against Ukraine that have caused inputs such as fertilizer to surge in price nationwide worker shortages and inflation and high energy prices, the economists noted.įarmers harvest tomatoes in Winters, California, US, on Friday, Aug. “The prolonged droughts that we’re seeing some increased risk that inflation remains higher for a longer time,” said Charlie Dougherty, a Wells Fargo economist who recently co-authored a status report on the economic state of American agriculture. Scorching heat and drought continue to bear down on the American West, forcing farmers in vital agriculture-producing states to fallow land, pull up orchards, reduce livestock herds, and slash expected yields. But food prices rose at an even faster pace, increasing by 11.4% during that period, according to the Bureau of Labor Statistics. The Consumer Price Index, which measures price changes for a basket of goods and services, showed inflation hit 8.3% in August from the year before. Weather has long been a fickle farmhand, devastating fields one year while delivering bountiful harvests the next.īut as extreme weather events increase in frequency or become even more intense, the unpredictability is becoming more of an economic liability.Īs the United States continues to battle high inflation, the effects of prolonged droughts and extreme weather events could help keep the heat on prices for a long time to come. ![]()
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