WEATHER -- July 26, 2012 at 3:47 PM ET
USDA: Severe Drought Will Drive Up Cost of Food
The drought gripping the Midwest is affecting 88 percent of the country's corn crop and will send food prices up next year, according to a report released Wednesday by the U.S. Department of Agriculture.
By 2013, consumers will see a 2.5 to 5 percent spike in prices for beef, pork, eggs and dairy products. The drought will also impact export prices, sending the price of corn higher around the world.
More than 20 percent of the nation's land is in extreme or exceptional drought and shows no sign of abating, according to the weekly U.S. Drought Monitor report. It is the worst drought in nearly 50 years.
Hari Sreenevasan spoke Thursday with Richard Volpe, research economist for the USDA. He began by asking how the drought will impact the global economy.
We then asked if prices will rise equally across the country or hit particular regions harder than others.
The USDA had predicted that this would be the largest corn harvest on record, but Volpe says that prediction has been revised.