Behind the Cornucopia of Higher Food Prices

Photo Credit: CNBC

Alert shoppers are accustomed to watching food prices go up and down. But a string of forces—from droughts to diseases—is raising the cost of a trip to the grocery store at a rapid clip.

And it looks like it will be a while before the price pressure eases.

Some of that pressure is coming from California—the source of roughly half the nation’s fruits and vegetables—where a long-running drought is forcing farmers and ranchers to cut production. After the driest year on record, large sections of farmland are expected to lay fallow this year as the Golden State copes with an ongoing water crisis

That could have “large and lasting effects on fruit, vegetable, dairy and egg prices,” according to a recent USDA report, which said the full impact has yet to be felt.

Smaller cattle herds have forced meat prices higher in March—up more than 5 percent from a year ago, as demand remained strong despite tightener supplies. Ranchers are getting higher prices for cattle and food companies are able to pass them along.