Beef prices could reach record levels and stay into 2015

A government report says the drought gripping much of the U.S. is the largest since 1956, with more than half the nation experiencing moderate to extreme drought. With no relief in sight, the arid conditions may soon start having a noticeable effect on the prices of everything from food to gasoline.

The biggest drought in more than half a century is leaving fields from Ohio to California dried up and desperate for rain. "We've never seen a drought like this," Illinois Gov. Pat Quinn told reporters. "You can see firsthand how depleted, how serious this matter is," Quinn continued, holding up an ear of dried-out corn.

The Department of Agriculture estimates that nearly 40 percent of the nation's corn crop is in poor condition, and Purdue University economist Chris Hurt says that's bound to have a ripple effect on the economy. "There's no question that this is a major drought and it's going to cost us tens of billions of dollars," he observes.

Here's why: According to the USDA, corn accounts for more than 90 percent of feed grain production, so as the price of corn goes up, so does the cost of feeding and maintaining cattle. That could lead to higher prices for meat and dairy products in the grocery store, hitting consumers at an already tough economic time. Read more >>