It's no secret that a warming world will drive food prices higher, a phenomenon increasingly known as "heatflation." What's less known, but a growing area of interest among economists and scientists alike, is the role individual extreme weather events — blistering temperatures in Texas, a destructive tornado in Iowa — may have on what U.S. consumers pay at the supermarket.
At first glance, the answer might seem logical: A drought or flood that impacts agricultural production will, eventually, drive up prices. But it's not that simple, because what consumers pay for groceries isn't only reflective of crop yields or herd sizes, but the whole supply chain. That's where it gets interesting: Economists are beginning to see a growing trend that suggests weather forecasts play a part in sticker shock. Sometimes the mere prediction of an extreme event — like the record-breaking temperatures, hurricanes, and wildfires forecasters are bracing for this summer — can prompt a spike in prices.
