Tue March 26, 2013
As Drought Persists, Grocery Prices Rise
The cost of groceries in Texas has gone up as a result of drought conditions in Texas and across the country.
A survey from the Texas Farmers Bureau finds that the price of a uniform basket of goods for an average Texas shopper is $46.40, a five and a half percent rise over last fiscal quarter.
Amanda Hill, a spokesperson for the bureau, says the survey uses 16 items – including chicken breast, grapefruit, tomatoes, milk, rice, deli slices, bread and cereal – to measure the cost across grocers. This year, Hill says, the drought’s agricultural impact spread to other states.
“For the past several quarters…we went through a historic drought here in Texas and now several other parts of the country are going through the same thing,” Hill said. “And we knew that grocery prices would be affected by those conditions at some point. We now, in the first quarter of 2013, have seen that increase.”
Hill says that Texas grocery prices are not only affected by Texas agriculture, but also agricultural production in other states that has been halted or limited by drought conditions. According to the USDA’s drought monitor eight states are experiencing an exceptional level of drought, including Texas, Oklahoma, Colorado, Kansas, South Dakota, Iowa, Colorado and Wyoming.
These drought conditions could lead to a scarcity of product, and then an increase in price to recoup the costs –a lack of water to keep cattle hydrated also means less hay to keep cows fed. As Texas cattle numbers dwindle, the price for beef increases with demand.
Prices of ground beef and steak increased 10 percent and a 19 percent respectively from the bureau’s November 2012 survey.
“It is certainly something that makes farmers and ranchers make some decisions on their operations. If they’re a ranch, they may not be able to keep all their cattle,” Hill says “And if they sell their cattle, that obviously affects the market, which trickles down to retail.”
According to a report earlier this month from the U.S. Drought Monitor, the area of Texas in exceptional drought increased from 7.4 to nearly 8.6 percent, but areas with extreme drought fell slightly (less than a percentage point) to 23 percent.