Sept. 3, 2014
CBS MoneyWatch - Consumers shopping for their breakfast foods may be experiencing sticker shock, with the price of dairy, coffee, eggs, bacon and other morning staples continuing to rise.
One major factor pushing up food prices is the ongoing drought that, according to the U.S. Drought Monitor, is affecting about one-third of the nation. California, one of the most agriculturally productive places on the globe, has been hardest hit, and is currently suffering through historic drought conditions.
An analysis in July by the University of California Davis Center For Watershed Sciences found the dry conditions were costing the state $2.2 billion in costs, as well as over 17,000 jobs. And regardless of any new moisture brought by an El Niño weather conditions, California's drought is expected to continue through next year.
Droughts in Oklahoma, Texas and several other key cattle-producing states have thinned beef herds to numbers not seen since the early 1950. And drought in Brazil, the world's top coffee producer, has reduced that crop to its lowest levels in decades.
Another factor driving up meat prices: disease. U.S. pork production is still recovering from a virus that swept across the country, killing millions of baby pigs. That, along with higher grain prices for pork and bacon's growing popularity, have pushed bacon prices to a 30-year high. Orange and orange juice production, meanwhile, have been hurt by a widespread bacteria outbreak.
And then there is America's changing consumer tastes: Corn production may end the year at record levels, but consumers are eating less corn and other cereals for breakfast, preferring instead to start the day with protein and dairy products.
"More people are having yogurt now," Avi Kaner, an owner at the family-owned Morton Williams Supermarkets chain, tells CBS News. "That's put pressure on milk. It's really every category that a consumer shops for is under price pressure."
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