Food prices not expected to come down anytime soon
DES MOINES — Iowa Farm Bureau economist Sam Funk doesn’t expect all the logistics and other issues to be sorted out and bring food prices down as we move into a new year.
“You know I really doubt that the prices are going to decrease going into the new year. I really think it’s going to be a longer-term inflationary pressure that we’re still going to feel,” Funk says.
Fertilizer prices have been rising — and he says the cost of all other inputs used by farmers are unlikely to drop. “If you think about just increasing the price of fertilizer for our corn and soybean fields even across Iowa — you’ve got to think that that’s probably going to push more and more areas even outside of Iowa or lower productivity acres potentially in the state, they are going to take a hit because they won’t be able to afford to put fertilizer on those areas. We may take back some of that corn acreage or soybean acres,” according to Funk.
He says demand certainly won’t drop. “And frankly, with the demand, we’ve seen across the world, and people want to eat better. We will probably see some more inflationary pressure,” Funk says. “Federal policies, if we have any more of these programs out through there, you could see additional dollars that will make it potentially a higher amount of pressure for inflation to go up yet.”
Higher energy prices also figure into the equation. “We’ll probably actually see more pressure because we’ll see somewhat of a decrease in the amount of productivity that we can get out of the ground because we’ve got higher energy prices that just won’t be counteracted,” he says.
He says those issues will go along with the logistical problems the country is facing in getting the inputs in and the products out.