31/10/2006
The drought is expected to push up food prices with fewer crops and more expensive water.
But consumers will not be the only ones bearing the increased costs.
Market vegetable prices to consumers are expected to rise by at least 30 per cent but many growers are locked into fixed contracts with processors.
In some states dairy farmers have contracted prices or are paid based on world prices and so will have to bear some of the the higher costs of cattle feed themselves.
Chicken meat is expected to rise by about 15 per cent, but although red meat prices will rise in the long term, initially price fluctuations are expected to be absorbed by retailers.
Breakfast cereals will rise.
And flour millers say costs are expected to rise by up to 40 per cent, although bread makers are not saying how much they expect that to add onto the cost of a loaf.
