Hamilton food prices increase due to U.S. drought

Drought conditions in the U.S. are expected to jack up Canadian food prices by as much as 4 per cent in the next year.

We could soon be paying more for everything from pork to cereal, economists say.

RBC economist Paul Ferley expects food costs will rise 2.5 to 3.5 per cent this year and 3 to 4 per cent in 2013.

Extreme drought conditions in several U.S.-Midwest states are causing corn and soybean crops to wither, and analysts say the effects will ripple through the food chain.

Because corn is used to feed livestock in the U.S., Scotiabank's Patricia Mohr says the rising cost of beef and pork will be most noticeable on grocery store shelves.

Crystal Williams, a Hamilton Food Basics cashier, said she has noticed prices have gone up quickly.

"It's bread, milk, pop. Like those chips used to be 88 cents, but they went up like 11 cents in a month," said Williams, gesturing to a display near her check-out counter.

"I've noticed a lot of people buy items in bulk more, that's a growing trend," she said. Williams has worked as a cashier for five years.

Last week, Tim Hortons raised the price of some baked goods and lunch items by five to 10 cents.

But customers at a Tim Hortons on Barton Street East do not seem concerned, said Nathan Ehler, who has worked as the store's manager for eight years.

"If the price of coffee had gone up, they'd complain," he said.

With files from the Canadian Press.