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But -- drought is already affecting crops and the question is how will this shortage of these farm products like corn and wheat.
Soybeans affected commodities market and more importantly.
How much will it affect your grocery bill joining me now Fox Business network's Sandra Smith and commodities is sure we allows so that somebody about food prices.
I expected them to go up right now -- -- US Department of Agriculture says that -- prices are gonna got three to 5% next year.
You don't might be the best case scenario -- we're looking at core prices at a record high if you haven't looked late Leary have it -- back at history.
-- we've been trading over eight dollars a bushel.
Got to tell -- -- there was a period of time when I was a kid were core prices were tuned to two dollars and fifty cents a bushel for over a decade they sat there.
We're looking at eight dollars I've talked to folks who think that we could top ten dollars a bushel.
Corn goes in the 75%.
Of all grocery store products for the you like -- or not it's a -- -- from cereal to that meet the he would eat this scheme Karen your these goes into it or not to -- Heard that number recently I was suppose the stunned that is its corn and soybeans are going to the grocery store 7580%.
Of their grocery store is.
Is that absolutely somewhere in that bring Heidi getting -- the grocery store you're putting gasoline and your take what's and that gasoline tank.
At at -- -- at the -- primary ingredient is corn -- you're talking about pretty much the price of everything as a consumer going up as a result of this drought.
-- as a result of just overall growing global demand and appetites.
For meat and food -- in general.
To tell me about -- ethanol because that's growing.
You should grow I think you should grow food for food right but -- grow food for -- gasoline.
I thought there were some limit or they were gonna change -- -- wasn't going to be as bad as in the past what's what's the ethanol I've.
About 40% of our US corn crop and we are the biggest corn exporter in the world about 40% of our US crop.
Is going into the gas tank right now there's a government mandate and that at an -- Tom I ain't been predicting right now that if corn prices stay above eight dollars.
And if we continue to see food prices continue to escalate and consumers will start to feel the effects of this.
This is -- -- come in need your election issue you're gonna start to hear politicians talk about that ethanol mandate more and more.
As people are paying more for their food -- we are sacrificing our corn crop to go into our gasoline tank right now people are gonna have a major problem.
Well we can take the bus -- we can take public transit -- do something to cut back on our gas usage.
But we can't cut back on our our food usage.
You're talking about our Staples this is going into the cereals that we -- the bread that we.
They in India other angle of the story is the ranchers out in the midwest that have suffered through this drought and they're now paying eight dollars -- for corn.
They feed their animals corn weathered the cattle are the hogs are they -- the -- green -- that.
Are uninsured and are they at some point saying you know what I'm not gonna put more money into my a -- because I got an insurance policy.
Great question is a great question I've actually been exploring that in my reporting.
Some of the ranchers do have insurance in some cases they'll be profitable and be just fine.
That insurance is very very costly so -- those farmers that -- willing to to take on at risk of paying for that insurance.
Their stock in their stock backwards and they're basically having just kill off there.
On their animals because it can't afford to feed them anymore and that could mean in the future very tight supply of -- On those grocery store south -- -- it has -- up on anything right now and -- this drought continues in these high prices remain high -- your freezer -- -- let me tell you something.
That that global impact to not only what not or this is another headwind for our economy to recover if we're overall paying more for.
Food that but you hear these stories about the fact that there's concern of global security problems.
The riots in in different parts of the world because of a shortage.
While I mean we saw that -- is on a decade could eventually happen here at home.
We went through that with the rice remember there's a shortage of rice in the United States there's a big problem.
And it if we continue to see prices if for instance court we're not -- -- -- -- -- -- -- soy beans.
This is also wheat prices this is the general make up of everything that we we continue to see these prices go up and we continue to see global to growth in places like China.
In India and Russia and they continue to buy more of these grains because they're having problems -- that's gonna skyrocket prices for everybody and we will be in a global fight.
For that food town one more thing to add to the list Sharon Covert of headwinds for our economy thank you think repeated the -- him.
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