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Consumers may have to pay more after U.S. drought

Drought conditions across large swaths of the United States and parts of Europe are causing concern about a food price shock later this year.

But while consumers brace to pay higher prices for everything from corn flakes to bread to beef, many Canadian farmers hope to reap rewards from historically high grain prices.

The U.S. Department of Agriculture predicts that farmers south of the border will see just a fraction of the corn they expected in the spring when the ground was seeded.

That prediction has sent the price of corn through the roof and is pushing almost all grain commodity prices higher.

Myron Krahm, vice-president of the Manitoba Corn Growers Association, says if the weather holds in most corn-growing regions of Canada over the rest of this month, farmers will cash in.

And while John Cranfield with the Canadian Agricultural Economics Society says that’ll be good for farmers, the grain price hikes will have a ripple effect throughout the economy if they hold.