(NEW YORK) — The price of many food products could increase later this year as much of the country is hit with the worst drought in a generation.
Wholesale corn prices shot up nearly 5 percent Monday, and soybean prices are also heading higher.
Crop losses will be a blow to America’s rural economy and cut farm exports. The U.S. Agriculture Department slashed its estimate of this fall’s corn crop by 12 percent – compared with last month’s forecast. Officials say 38 percent of the corn crop is in poor condition because of the drought. A shortage of corn and soybeans is raising concerns about global food shortages and inflation.
Still, it may take months for some food and meat costs to rise in supermarkets.
According to a government estimate, cereals and grains accounts for just 2 percent of the U.S. consumer price index.
Copyright 2012 ABC News Radio
Ralph Ellis, CNN
Kathryn Vasel, CNN
Heather Long, CNN