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Drought will bring about higher food prices, U.S. warns

• Suzanne Goldenberg, The Guardian

The US government acknowledged for the first time on Wednesday that the drought now covering two-thirds of the country will lead to significantly higher food prices.

The catastrophe in the corn belt, which has seen crops decimated by extreme heat and prolonged drought, will have ripple effects throughout the food system, the department of agriculture said in its food price outlook.

US consumers can expect to pay up to 4.5% more for beef because corn, which is used for cattle feed, will be in such tight supply, the report said.

Chicken and turkey were also projected to rise by up to 4.5%, and the price of eggs will also go up, but by about 2%.

Cooking oil, which is produced by the most devastated crops – corn and soybean – is projected to rise by 4.5% as well.Cattle, US drought, Indiana

Supermarket shoppers will probably notice the higher prices with chicken first, because they have a shorter lifespan. Food price inflation for other items, such as cereal and baked goods, will begin working their way through the system in 2013, the report said.

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