• Jeff Fox: Will drought hurt consumers?

  • Will this year’s crops, hammered by drought, send inflation higher?

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  • Will this year’s crops, hammered by drought, send inflation higher?
    Not as much as you might think, says the Federal Reserve Bank of Kansas City.
    “Rising food prices could lead to moderate increases in overall inflation. According to the Bureau of Labor Statistics, the (consumer price index) for food contributes a 14-percent share to the overall CPI. Thus, a 4-percent rise in retail food price inflation would contribute 0.6 percent to overall inflation. Higher food prices have little relationship to core CPI,” the KC Fed says in its “Main Street Economist” publication.
    That 4 percent is about what the KC Fed sees the drought adding to food prices.
    Farmers are harvesting less but getting better prices per bushel. A year ago, soybeans were selling for around $12 a bushel in Kansas City. Last Friday, the price was $15.52, according to the Missouri Department of Agriculture. Corn was bouncing around $6 a bushel then, and it’s north of $7 – sometimes close to $8 – at the moment.
    Bucks and bucks
    What’s a deer worth to the state of Missouri? What are 1.5 million worth?
    Governor Jay Nixon was at Bass Pro Shops in Independence the other day to promote the Share the Harvest program, in which hunters donate venison to food shelves across the state.
    But before launching into that, Nixon paused for a moment to sing the glories of fall in Missouri – he likes to hunt, too – and then talk about what deer season means to the state’s economy. He put it at $1.1 billion in revenues and 11,000 jobs. The head of the Conservation Federation of Missouri, Dave Murphy, estimated that hunters might take 300,000 deer this fall, out of the total population of 1.5 million.
    “ ... It’s easy to make that connection between economy and sportsmanship,” Nixon said.
    The governor also thanked Bass Pro for its support of programs such as Share the Harvest. He said he was at the store’s 2008 opening, adding with a chuckle, “I have been here since then and shopped here and added to the local economy.”
    Jeff Fox is The Examiner's business editor. Reach him at 816-350-6313 or jeff.fox@examiner.net. Follow on Twitter @Jeff_Fox.

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