As the drought continues to affect crops across the country, many have begun to speculate about what it means for food prices. Corn is without a doubt a very important part of our world’s food system, but the effect it has on prices at the grocery store is not.
For instance, at $8 per bushel, the amount of corn in a box of corn flakes costs about 12 cents total. At that same price per bushel, there’s only about 37 cents’ worth of corn in a pound of hamburger. As you can see, corn remains an inexpensive food ingredient.
In fact, it’s not only corn but all of American agriculture continues to deliver abundant and affordable food as consumers spend a lower percentage of their income on what they eat than any other country in the world.
As bad as things may seem in the news, it’s still far too early to begin to panic about what kind of crop America’s farmers will produce before they get a chance to do so.
As the United States Secretary of Agriculture Tom Vilsack said in a statement last week, “We’re not going to know the full extent of this drought until the cotton is picked, the beans and kernels are counted.”
“It takes a long time for prices to work through the system,” added Vilsack.
If you are concerned about food price spikes, just take a look at America’s food dollar to see what kind of impact different industries have on what you spend at the grocery store. You will see just how little goes to farming and much goes to processing, energy, transportation and packaging.