Why grocery bills will likely be higher in 2013

Published On: Dec 11 2012 04:43:37 PM CST   Updated On: Dec 11 2012 06:01:19 PM CST
HOLMEN, Wis. -

Despite a long drought earlier this year, food prices have remained pretty flat in 2012. That's according to USDA research.

There could be a big change in prices, however, coming in 2013.

The first reason why is that prolonged drought across the entire Midwest this summer. Experts say it takes awhile for the effects of that to be felt.

On top of that, there's the looming fiscal cliff and the 5-year farm bill, which Congress has yet to extend.

On Tuesday, about 50 area soybean farmers gathered in Holmen Tuesday to talk about the coming year.

"As far as soybeans, I'm very optimistic," said Tim Goodenough, who farms 1,000 acres of land near Mindoro.

Even though he's hopeful for 2013, Goodenough says another drought would really impact prices at the grocery store.

"I think we're maintaining (prices) right now. The only way I can see it going up again is if there's another major drought across this country," he said.

Experts, however, say signs are pointing to higher dairy and meat prices either way.

Shawn Conley, Wisconsin's soybean and small grain specialist, says the feed shortage caused by the drought forced many farmers to sell their animals for slaughter earlier than expected.

"Probably 4 or 5 months from now, when those calves that would have gone through the cycle are no longer there, I think we're going to see a significant bump in beef and other meat prices," said Conley.

Conley says next season will start with the soil already low in moisture. Couple that with the fact that federal insurance programs are currently not guaranteed, many farmers will be taking a bigger risk than normal.

"It's just a protection if you have a bad year. You're not going to make any money by any means. It's just to protect your input costs," said Goodenough.

Not only do farmers stand to suffer but with food prices also in jeopardy, everyone could feel the impact.

"Growers are making decisions for 2013. We can't wait for the government to make up (its) mind," said Conley