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Price Intelligence: Record Drought Raises Food Prices In US

August 25, 2012
Written By

The worst drought to hit the US in more than half a century has had a devastating effect on the country’s agricultural industry. The damage to the multibillion-dollar industry is now affecting the price of groceries in stores.
US shoppers are feeling the brunt of the country’s drought when carrying out their weekly food shop. Supermarket prices are rising rapidly as the adverse weather shows no sign of abating. Pricing intelligence analysts have predicted that prices will increase again next month for milk, pork and poultry. It is expected that the drought will also spell price rises in cereals, corn flour and other processed foods in the near future.

John Aron of The Pasta Shoppe says the company’s main ingredient is wheat, the price of which rose by 18 per cent since the firm placed its last order. The dramatic price rise had led to the food company ordering less in bulk this time around. Other food manufacturers report that the price of celery has risen 11 per cent from a year ago. Meanwhile, egg prices are up almost 25 per cent in the past month alone.

With such rapid price increases, it is only a matter of time before consumers are hit with more price hikes at the tills and online. “The US drought is indeed a ‘catastrophic’ event,” wrote Morgan Stanley insurance analyst Gregory W. Locraft in a recent note to clients. He added that it “is likely the largest [insurance] crop loss in history.” Consumers are now using the Internet to carry out competitor price monitoring to find the best deals on the market.

© Profitero 2012

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About Profitero

Pricing intelligence company Profitero works with retailers and manufacturers to help them increase sales and maximise their profits by using competitor price, promotions and stock information at scale. For more information on Profitero price intelligence and competitor monitoring, visit or email

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