PRICES AND SPENDING

U.S. BUREAU OF LABOR STATISTICS

NOVEMBER 2012 • VOLUME 1/ NUMBER 18

U.S. BUREAU OF LABOR STATISTICS | NOVEMBER 2012 1 www.bls.gov

Will the 2012 drought have a bigger impact on grocery 

prices than the 1988 drought?

Authors: Producer Price Index program staff 

I

n the summer of 2012, the United States experienced its worst 

drought since the 1980s.1

 According to the U.S. Department 

of Agriculture (USDA), 80 percent of agricultural land in the 

United States experienced drought conditions in 2012. Extremely 

dry weather can lead to crop failure, which reduces supplies, and 

subsequently increases prices. This is important to consumers because 

higher crop prices typically lead to higher prices for groceries. 

A previous Focus on Prices and Spending article examined the 

lag between an increase in agricultural prices and an increase in 

consumers’ grocery bills. The article found that changes in the 

Producer Price Index (PPI) for processed foods and feeds usually 

has an impact on the amount consumers pay for food at home 

3 to 4 months later. However, periods of drought are considered 

unusual and may impose a different shock to our food costs, 

depending on the drought locations and severity.

Related articles

More BLS articles and information related to 

agricultural prices are available online at the 

following links:

y “Impact of the drought on corn exports:

paying the price,” http://www.bls.gov/

opub/btn/volume-1/impact-of-thedrought-on-corn-exports-payingthe-price.htm.

y “Grain Prices and Our Grocery Bill,” 

http://www.bls.gov/opub/focus/

volume2_number2/ppi_2_2.htm.

y “The 1996 Grain Price Shock: How did it

Affect Food Inflation,” http://stats.bls.gov/

opub/mlr/1998/08/art1full.pdf.
U.S. BUREAU OF LABOR STATISTICS | NOVEMBER 2012 2 www.bls.gov

BEYOND THENUMBERS PRICES AND SPENDING

-1.5

-1.0

-0.5

0.0

0.5

1.0

1.5

2.0

2.5

3.0

-15

-10

-5

0

5

10

15

20

25

30

January March May July September November

Wheat Corn Soybeans Processed foods and feeds 

Wheat, corn, and 

soybeans

One-month percent change in PPI for wheat, corn, soybeans, and processed foods and feeds, 

January 1988–December 1988

SOURCE: U.S. Bureau of Labor Statistics.

-0.6

-0.4

-0.2

0.0

0.2

0.4

0.6

0.8

1.0

1.2

1.4

-15

-10

-5

0

5

10

15

20

25

30

35

January March May July September November

Wheat Corn Soybeans CPI food at home index

Wheat, corn, and 

soybeans

CPI food at 

home index

One-month percent change in PPI for wheat, corn, soybeans, and CPI food at home index, 

January 1988–December 1988

SOURCE: U.S. Bureau of Labor Statistics.

According to the National Oceanic and Atmospheric 

Administration’s National Weather Service, the 2012 

drought was similar to the 1988 drought, but was more 

widespread, affecting more states.2

 Should the 2012 

drought have a bigger impact on grocery prices than 

the 1988 drought?

The June 1988 drought resulted in PPI increases of 21.3 

percent for wheat, 26.0 percent for corn, and 22.5 percent 

for soybeans. The PPI for processed foods and feeds

increased 2.1 percent in June, and in July, the CPI food at 

home index increased 1.3 percent—the largest monthly 

advances for both indexes that year. Charts 1 and 2 show 

Chart 1

Chart 2

SOURCE: U.S. Bureau of Labor Statistics.

SOURCE: U.S. Bureau of Labor Statistics.
U.S. BUREAU OF LABOR STATISTICS | NOVEMBER 2012 3 www.bls.gov

BEYOND THENUMBERS PRICES AND SPENDING

-0.4

-0.2

0.0

0.2

0.4

0.6

0.8

1.0

-10

-5

0

5

10

15

20

25

January March May July

Wheat Corn Soybeans CPI food at home index

Wheat, corn, and 

soybeans

CPI food at 

home index

One-month percent change in PPI for wheat, corn, soybeans, and CPI Food at Home Index, 

January 2012–August 2012

SOURCE: U.S. Bureau of Labor Statistics.

-0.4

-0.2

0.0

0.2

0.4

0.6

0.8

1.0

1.2

-10

-5

0

5

10

15

20

25

30

January March May July

Wheat Corn Soybeans Processed foods and feeds 

Wheat, corn, 

and soybeans

Processfood 

and feeds

One-month percent change in PPI for wheat, corn, soybeans, and processed food and feeds, 

January 2012–August 2012 

SOURCE: U.S. Bureau of Labor Statistics.

how the drought in 1988 immediately caused a spike 

in prices for these major crops, and subsequently how 

much more consumers paid for food. 

In July 2012, drought again caused a spike in the PPI for 

wheat (20.2 percent), corn (20.5 percent), and soybeans 

(13.0 percent). In August 2012, the processed foods and 

feeds index increased 1.1 percent—the largest rise since 

August 2011. In contrast, the CPI food at home index 

advanced only 0.2 percent, compared with the 1.3-percent 

increase that occurred in July 1988. (See charts 3 and 4.)

Though the 2012 drought appears more widespread than 

the 1988 drought, price movements in the indexes for PPI 

processed foods and feeds and for CPI food at home were 

not as volatile as they were in 1988. In 1988, processed 

Chart 3

Chart 4

SOURCE: U.S. Bureau of Labor Statistics.

SOURCE: U.S. Bureau of Labor Statistics.
U.S. BUREAU OF LABOR STATISTICS | NOVEMBER 2012 4 www.bls.gov

BEYOND THENUMBERS PRICES AND SPENDING

3.0

5.5

1.8

0.8

3.7

0.0

1.0

2.0

3.0

4.0

5.0

6.0

7.0

2004-2011 2008 2009 2010 2011

Average annual percent change for the CPI food index, 2004–2011 and 2008–2011

SOURCE: U.S. Bureau of Labor Statistics.

Average annual percent change

foods and feeds prices increased immediately with the 

onset of the drought, but in 2012, there was a 1-month lag. 

In addition, prices for processed foods and feeds increased 

2.1 percent from May 1988 to June 1988, compared with a 

1.1-percent rise in prices from July 2012 to August 2012. 

In 2012, consumers seem to be protected from extremely 

high prices because the farming sector is better equipped 

to withstand drought conditions. Agricultural productivity 

increased 50 percent between 1982 and 2012; from 

1988 to 2012, farm income grew 147 percent, and crop 

insurance participation was up 60 percent.3

 These factors 

have made farmers more resilient during times of drought 

and have reduced the amount of price inflation that a 

drought may cause.4

Although the monthly food price increases were not as 

severe in 2012 as they were in 1988, increases of over 

20 percent for wheat and corn can seem quite alarming, 

especially considering that these commodities are the 

main ingredients in many popular food items. However, 

in order to put these price changes into perspective, an 

examination of the 12-month percent changes for these 

commodities is necessary. 

From August 1987 to August 1988 prices of wheat

increased 48.9 percent and corn prices jumped 90.9 

percent. Between September 1987 and September 1988, 

soybean prices increased 67.4 percent. This means that 

the drought in 1988 significantly raised commodity 

prices. In the 2012 drought, the price of wheat increased 

8.7 percent, the index for corn advanced 10.3 percent, 

and soybean prices rose 27.3 percent for the 12-months 

ended August 2012. 

The 12-month percent changes were less extreme in 

2012 than in 1988 because in 2012 the economy was 

experiencing very high commodity price levels just prior to 

the drought. Commodity prices were high in 2011 because 

of adverse weather conditions worldwide. Droughts in 

Russia, Ukraine, and Kazakhstan lowered the global supply 

of wheat.5

 A La Niña weather pattern, characterized by 

unusually cold ocean temperatures (3-5 degrees Celsius 

lower than normal), prevailed in 2011 and affected crop 

yields in Argentina.6, 7 La Niña also is blamed for Mexico’s 

crop freeze in 2011 and heavy rains in the United States 

that delayed planting for corn and soybean crops. Also 

in 2011, renewed income growth was increasing global 

food demand. This increase in demand, coupled with 

lower global supplies put upward pressure on prices 

of food commodities. These shocks increased prices of 

commodities well before the 2012 drought. Chart 5 shows 

that the historical average increase in consumer food 

Chart 5

SOURCE: U.S. Bureau of Labor Statistics.
U.S. BUREAU OF LABOR STATISTICS | NOVEMBER 2012 5 www.bls.gov

BEYOND THENUMBERS PRICES AND SPENDING

prices was 3.0 percent between 2004 and 2011. The USDA 

forecasts that average annual food price inflation will 

remain at 3.0 percent in 2012 and inch up to 3.5 percent in 

2013, which means that food price inflation should remain 

around its historical average, despite the 2012 drought.8

Although the summer 2012 drought was the worst since 

1988, food price inflation had been relatively robust in 

the years leading up to 2012. As a result, grocery bills are 

forecast to be in line with average historical food price 

inflation. So, although there may have been more dry land 

and hardships for many farmers, consumers should not 

notice as severe an impact in their grocery bills as during 

the 1988 drought.

Price trends: third quarter 

turnaround in producer inflation led 

by energy prices

The PPI for finished goods increased 3.1 percent in the third 

quarter of 2012 after falling 1.1 percent for the 3 months 

ended in June.9

 Most of this reversal can be attributed 

to prices for finished energy goods, which rose 10.9 

percent for the 3 months ended in September following 

a 6.4-percent decrease in the preceding quarter. Also 

contributing to the turnaround, the indexes for finished 

consumer foods and for finished goods less foods and 

energy moved up at faster rates compared with the second 

quarter. At the earlier stages of processing, prices received 

by manufacturers of intermediate goods advanced 1.7 

percent from June to September after declining 1.8 percent 

from March to June. As with finished goods, most of the 

upturn in prices for intermediate goods is attributable to 

the index for intermediate energy goods, which climbed 

7.2 percent following a 6.2-percent drop in the second 

quarter. Prices for intermediate foods and feeds rose more 

in the third quarter than for the 3 months ended in June, 

while the intermediate core index fell at a slightly slower 

rate in the third quarter than in the previous quarter.10

Prices for crude materials for further processing increased 

10.7 percent from June to September after decreasing 10.8 

percent from March to June. Over half of this upturn was 

due to the crude energy materials index, which jumped 

15.2 percent subsequent to a 16.5-percent decline in 

the second quarter. Prices for both crude foodstuffs and 

feedstuffs and for crude nonfood materials less energy also 

rose in the third quarter after falling in the prior quarter. 

Economic background

In the third quarter of 2012, higher prices for both crude 

petroleum and refined petroleum products led the upturn 

in producer inflation. Spot prices for West Texas Intermediate 

crude oil, which were nearly $110 per barrel in late February, 

dropped to roughly $77 by late June only to surge to nearly 

$100 in mid-September. Likewise, spot prices for New York 

Harbor Conventional gasoline dropped from $3.41 per 

gallon in early April to $2.44 on June 28, climbing back to 

$3.43 by mid-September.11 Domestic production of crude 

oil has expanded 11.6 percent in 2012, beginning the year 

at 5.844 million barrels per day (MBD) and ending the 

third quarter at 6.520 MBD.12 Total crude petroleum inputs 

to refineries, which include domestic production, as well 

as net imports and net changes in inventory, increased 

from 14.937 MBD at the start of the year to 15.796 MBD 

in mid-July. However, by late September crude oil inputs 

to refineries fell to 14.749 MBD, mostly due to declining 

imports. Net imports of crude oil, which mostly ranged from 

8.5 to 9.5 MBD during the first half of 2012, dropped to as 

low as 8.1 MBD by the close of the third quarter. As a result, 

crude petroleum inventory decreased in the third quarter 

from particularly high levels earlier in the year.13

Paralleling the crude petroleum market, domestic 

production of finished motor gasoline grew in the first half 

of 2012, beginning the year at 8.739 MBD and peaking in 

early June at 9.551 MBD. However, by the close of the third 

quarter, domestic production of finished motor gasoline 

had fallen to 8.638 MBD. In addition, gasoline imports were 

down during much of the second and third quarters.14 As 

a result, stocks of finished motor gasoline, which began 

2012 near the top of their 5-year historical range, declined 

in the second quarter to the lower end of their 5-year 

average range and remained at that level through the 

third quarter.15 A similar shift in inventory occurred for 

distillate fuel–heating oil and diesel fuel.16 Also impacting 

the petroleum market in the third quarter, hurricane Isaac 

threatened the U.S. Gulf Coast in late August, hindering 
U.S. BUREAU OF LABOR STATISTICS | NOVEMBER 2012 6 www.bls.gov

BEYOND THENUMBERS PRICES AND SPENDING

-1.1

0.1

-6.4

0.5

3.1

1.6

10.9

0.7

-8.0

-6.0

-4.0

-2.0

0.0

2.0

4.0

6.0

8.0

10.0

12.0

Overall Food Energy Core

Percent change Mar 2012 - Jun 2012 Jun 2012 - Sept 2012

SOURCE: U.S. Bureau of Labor Statistics.

Three-month percent change in PPI for overall, food, energy, and core finished goods, seasonally adjusted, 

second quarter 2012 and third quarter 2012

production for a two-week stretch, while refinery and 

pipeline disruptions in California cut into inventory 

replenishment.17, 18 In terms of overall refinery capacity and 

utilization, operable capacity declined 2.9 percent from 

December 2011 to July 2012, while utilization of remaining 

capacity increased from 86.5 percent in December 2011 to 

92.8 percent in July 2012.19

Finished goods

The PPI for finished goods turned up 3.1 percent for the 

3-month period ended September 2012, subsequent to 

a 1.1-percent decline for the 3 months ended in June. 

Accounting for most of this turnaround, prices for finished 

energy goods jumped from June to September, after falling in 

the previous quarter. Also contributing to the rise in prices for 

finished goods, the indexes for both finished consumer foods

and finished goods less foods and energy advanced more 

than they had in the 3 months ended in June. (See chart 6.)

From June to September, finished energy goods prices 

advanced 10.9 percent, compared with a 6.4-percent decline 

in the previous quarter. Prices for gasoline moved up 20.9 

percent subsequent to a 9.0-percent decline in the second 

quarter. The indexes for liquefied petroleum gas, residential 

electric power, diesel fuel, and home heating oil also turned 

up in the third quarter of 2012. In contrast, prices for finished 

lubricants moved down 1.0 percent for the 3 months ended 

in September, after rising 0.7 percent in the prior quarter.

The index for finished consumer foods rose 1.6 percent 

in the third quarter after inching up 0.1 percent in the 

preceding quarter. Leading this acceleration, prices 

for dairy products turned up 7.3 percent from June to 

September after declining 1.7 percent for the 3 months 

ended in June. The indexes for soft drinks and grains also 

turned up after moving down in the previous 3 months. 

Prices for pork fell less than they had in the prior quarter. 

Conversely, the rise in the index for beef and veal slowed 

to 2.8 percent in the third quarter from 6.1 percent in the 

second quarter. Prices for prepared poultry declined in the 

third quarter after rising from March to June.

The index for finished goods less foods and energy

advanced 0.7 percent for the 3-month period ended in 

September, following a 0.5-percent gain in the second 

quarter. From June to September, higher prices for light 

motor trucks, pharmaceutical preparations, cigarettes, 

alcoholic beverages, and passenger cars outweighed lower 

prices for electronic computers and commercial furniture.

Chart 6

SOURCE: U.S. Bureau of Labor Statistics.
U.S. BUREAU OF LABOR STATISTICS | NOVEMBER 2012 7 www.bls.gov

BEYOND THENUMBERS PRICES AND SPENDING

-1.8

1.2

-6.2

-0.7

1.7

6.0

7.2

-0.6

-8.0

-6.0

-4.0

-2.0

0.0

2.0

4.0

6.0

8.0

Overall Food Energy Core

Percent change Mar 2012 - Jun 2012 Jun 2012 - Sept 2012

SOURCE: U.S. Bureau of Labor Statistics.

Three-month percent change in PPI for overall, food, energy, and core intermediate goods, seasonally 

adjusted, second quarter 2012 and third quarter 2012

Intermediate goods

After falling 1.8 percent in the second quarter of 2012, the 

PPI for intermediate materials, supplies, and components

increased 1.7 percent in the third quarter. Most of this 

upturn can be traced to prices for intermediate energy 

goods, which climbed from June to September following 

a drop for the 3 months ended in June. Contributing to 

lesser degrees, the index for intermediate foods and feeds

moved up more in the 3 months ended in September than 

in the prior quarter and prices for intermediate goods 

other than foods and energy declined less than in the 

second quarter. (See chart 7.)

The index for intermediate energy goods rose 7.2 

percent in the third quarter after falling 6.2 percent for 

the 3 months ended in June. Price movements for diesel 

fuel were a major factor in this reversal, surging 18.1 

percent following a 14.3-percent drop in the preceding 

quarter. Prices for gasoline, jet fuel, lubricating oil 

base stocks, liquefied petroleum gas, and industrial 

electric power also turned up in the third quarter 

after decreasing in the second quarter. In contrast, the 

asphalt index declined 8.6 percent for the 3 months 

ended in September following a 5.5-percent increase in 

the previous quarter.

The index for intermediate foods and feeds climbed 

6.0 percent for the 3 months ended in September after 

advancing 1.2 percent in the second quarter. About half 

of this acceleration can be traced to prices for prepared 

animal feeds, which jumped 15.5 percent following a 

5.1-percent increase in the prior quarter. Prices for dairy 

products, processed eggs, and flour and flour-base mixes 

and doughs turned up in the third quarter. The index for 

pork products fell less than it did from March to June. In 

contrast, the index for beef and veal moved up 2.8 percent 

for the 3 months ended in September after rising 6.1 

percent in the second quarter. 

Following a 0.7-percent decline in the second quarter, 

the index for intermediate goods less foods and energy

fell at a similar 0.6-percent rate for the 3 months ended 

in September. In the third quarter, lower prices for basic 

organic chemicals, steel mill products, plastic packaging 

products, synthetic rubber, and fabricated structural metal

outweighed higher prices for drugs and pharmaceuticals as 

well as hardboard, particleboard, and fiberboard products.

Crude goods

The PPI for crude materials for further processing advanced 

10.7 percent for the 3 months ended in September after 

Chart 7

SOURCE: U.S. Bureau of Labor Statistics.
U.S. BUREAU OF LABOR STATISTICS | NOVEMBER 2012 8 www.bls.gov

BEYOND THENUMBERS PRICES AND SPENDING

-10.8

-7.0

-16.5

-6.9

10.7 11.8

15.2

2.6

-18.0

-15.0

-12.0

-9.0

-6.0

-3.0

0.0

3.0

6.0

9.0

12.0

15.0

18.0

Overall Food Energy Core

Percent change Mar 2012 - Jun 2012 Jun 2012 - Sept 2012

SOURCE: U.S. Bureau of Labor Statistics.

Three-month percent change in PPI for overall, food, energy, and core crude goods, seasonally adjusted, 

second quarter 2012 and third quarter 2012

falling 10.8 percent during the second quarter. The upturn 

in prices for crude materials was broad based as the 

indexes for crude energy materials, crude foodstuffs and 

feedstuffs and crude nonfood materials less energy all 

increased in the third quarter of 2012 following declines 

for the 3 months ended in June. (See chart 8.)

Prices for crude energy materials rose 15.2 percent from 

June to September compared with a 16.5-percent decrease 

in the prior 3-month period. Leading this upturn, the 

crude petroleum index climbed 21.2 percent in the third 

quarter after dropping 25.2 percent from March to June. 

Natural gas prices increased 12.7 percent, subsequent to 

a 2.9-percent decline for the 3 months ended in June. The 

coal index advanced 1.7 percent from June to September 

following a 0.9-percent gain in the second quarter.

The index for crude foodstuffs and feedstuffs moved up 

11.8 percent in the third quarter after falling 7.0 percent 

from March to June. Prices for grains jumped 30.8 percent 

from June to September, subsequent to an 8.0-percent 

decrease in the previous quarter. The indexes for hay, 

hayseeds, and oilseeds, raw milk, slaughter steers and 

heifers, and slaughter chickens also turned up in the third 

quarter following declines in the previous 3-month period. 

In contrast, the index for slaughter hogs dropped 25.0 

percent in the 3 months ended in September compared 

with a 2.4-percent gain from March to June. 

Prices for crude nonfood materials less energy rose 2.6 

percent for the 3 months ended in September, compared 

with a 6.9-percent decline in the preceding quarter. The 

index for nonferrous metals moved up 1.1 percent in the 

third quarter, subsequent to a 4.9-percent decrease in the 

3 months ended in June. Similarly, prices for grains also 

advanced from June to September after moving down 

from March to June. The index for carbon steel scrap fell 

less in the third quarter, and prices for soybeans rose more 

than they had in the 3 months ended in June. Conversely, 

the index for wastepaper dropped 27.0 percent for the 

3 months ended in September following a 5.4-percent 

decrease from March to June. Prices for raw cotton also fell 

more from June to September, compared with the prior 

quarter. The iron ores index declined in the third quarter 

after climbing in the 3 months ended in June, and prices 

for concrete ingredients and related products increased 

less than they had in the second quarter.

Trade industries

The Producer Price Index for the net output of total trade 

industries decreased 0.5 percent from June to September, 

after moving up 0.5 percent in the second quarter of 2012. 

Chart 8

SOURCE: U.S. Bureau of Labor Statistics.
BEYOND THENUMBERS PRICES AND SPENDING

U.S. BUREAU OF LABOR STATISTICS | NOVEMBER 2012 9 www.bls.gov

Upcoming articles

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Visit our online archives to access past publications at

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(Trade industry PPIs measure changes in margins received 

by wholesalers and retailers.) For the 3 months ended in 

September, margins received by gasoline stations dropped 

14.9 percent compared with a 12.7-percent increase from 

March to June. Indexes for clothing stores, fuel dealers, and 

electronics and appliance stores also turned down in the 

third quarter after rising in the previous 3-month period. 

Margins received by warehouse clubs and supercenters

rose less from June to September than in the preceding 

quarter. In contrast, the margin index for wholesale 

trade industries turned up 1.3 percent subsequent to a 

0.5-percent decline a quarter earlier. 

Transportation and warehousing industries

The Producer Price Index for the net output of 

transportation and warehousing industries moved 

down 1.0 percent in the third quarter, subsequent to a 

0.2-percent rise in the preceding 3-month period. For the 

3 months ended in September, prices received by the 

scheduled air transportation industry group dropped 6.9 

percent after advancing 0.2 percent in the second quarter. 

Similarly, the indexes for couriers and express delivery 

services and for line-haul railroads also turned down in 

the third quarter. Conversely, prices received by the truck 

transportation industry group increased 1.9 percent 

for the 3 months ended in September, compared with 

a 0.6-percent decline from March to June. The indexes 

for local specialized trucking of new goods, pipeline 

transportation of crude oil, and air transportation support 

activities also turned up from June to September.

Traditional service industries

The Producer Price index for the net output of total 

traditional service industries rose 0.4 percent for the 

3 months ended in September, compared with a 

0.3-percent advance in the previous quarter. From 

June to September higher prices received by portfolio 

managers, hospitals, and offices of certified public 

accountants outweighed decreases in the indexes for 

depository credit intermediaries, noncasino hotels and 

motels, and software publishers. 

This BEYOND THE NUMBERS report was prepared

by the Producer Price Index Staff, economists, in the Office 

of Prices and Living Conditions, Producer Price Index program. 

Email: ppi-info@bls.gov. Telephone: 202-691-7705.

Information in this article will be made available to 

sensory-impaired individuals upon request. Voice phone: 

(202) 691-5200. Federal Relay Service: 1-800-877-8339. 

This article is in the public domain and may be reproduced 

without permission.

Suggested citation:

Producer Price Index Staff,” Will the 2012 drought have a

bigger impact on grocery prices than the 1988 drought?”

Beyond the Numbers: Employment and Unemployment, 

vol. 1, no. 18 (Bureau of Labor Statistics, November 2012), 

http://www.bls.gov/opub/btn/volume-1/will-the-2012-

drought-have-a-bigger-impact-on-grocery-pricesthan-the-1988-drought.htm.

Notes

1. “U.S. Drought 2012: Farm and Food Impacts,” United States Department of Agriculture, September 25, 2012, www.ers.usda.gov/

newsroom/us-drought-2012-farm-and-food-impacts.aspx

2. “Drought 2012 vs. Drought 1988,” National Oceanic and Atmospheric Administration, National Weather Service, Wilmington, 

OH, July 8, 2012, www.erh.noaa.gov/iln/climo/summaries/1988_2012/1988_2012.php
BEYOND THENUMBERS PRICES AND SPENDING

U.S. BUREAU OF LABOR STATISTICS | NOVEMBER 2012 10 www.bls.gov

3. “Resilience of American Agriculture – Innovation, Diversity, and Growing Markets,” United States Department of Agriculture, as 

of October 2, 2012, www.usda.gov/documents/drought-infographic.pdf

4. Ibid.

5. Amber Waves, “Why Another Food Commodity Price Spike?” United States Department of Agriculture, http://www.ers.usda.gov/

amber-waves/2011-september/commodity-price-spike.aspx

6. National Oceanic and Atmospheric Administration, National Weather Service: http://www.publicaffairs.noaa.gov/lanina.html

7. Amber Waves, “Why Another Food Commodity Price Spike?”United States Department of Agriculture, http://www.ers.usda.gov/

amber-waves/2011-september/commodity-price-spike.aspx

8. “US Drought and Your Food Costs,” United States Department of Agriculture,” as of October 2, 2012, 

www.usda.gov/documents/drought-infographic-food-costs.pdf

9. Price movements for PPIs described in this summary include preliminary data for June 2012 through September 2012. All PPI 

data are recalculated 4 months after original publication to reflect late data received from survey respondents. In addition, 

seasonally adjusted PPIs are recalculated on an annual basis for 5 years, to reflect more recent seasonal patterns.

10. Within the PPI stage-of-processing structure, the indexes for goods other than foods and energy commonly are referred to as 

the core indexes.

11. Weekly Petroleum Status Report, DOE/EIA-0208(2012-92), U.S. Energy Information Administration, (U.S. Department of Energy),

October 11, 2012, Figure 7, page 24, http://www.eia.gov/pub/oil_gas/petroleum/data_publications/weekly_petroleum_

status_report/historical/2012/2012_10_11/pdf/wpsrall.pdf. 

12. The data that follow are from the database of the United States Department of Energy, Energy Information Administration 

(EIA). For crude oil domestic production figures, go to http://www.eia.gov/dnav/pet/pet_sum_sndw_dcus_nus_w.htm

and select the “View History” option that corresponds with the “Domestic Production” entry. For total net inputs to refineries, 

select the “View History” option that corresponds with the “Crude Oil Inputs” entry. For weekly U.S. imports of crude oil, go to 

http://www.eia.gov/dnav/pet/pet_move_wkly_dc_NUS-Z00_mbblpd_w.htm and select the “View History” option that 

corresponds with the “Crude Oil” entry.

13. See note 11, Figure 1 on page 5. 

14. To obtain data for finished motor gasoline production and for gasoline imports, link to the EIA Website at http://www.eia.gov/

dnav/pet/pet_sum_sndw_dcus_nus_w.htm. For finished motor gasoline figures, select the “View History” option that 

corresponds with the “Finished Motor Gasoline” entry. For gasoline imports, select the “View History” option that corresponds 

with the “Imports, Total Motor Gasoline” entry. 

15. See note 11, Figure 2 on page 7.

16. See note 11, Figure 3 on page 9.

17. See note 12 and extract data for “Crude Petroleum Inputs.” 

18. Jim Carlton and Erica Orden, “California’s Gas Prices Expected to Ease,” The Wall Street Journal, section A, page 4, U.S. edition,

October 9, 2012, on the Web at http://online.wsj.com/article/SB10000872396390444897304578044542000498504.

html?KEYWORDS=petroleum+refinery+problems+california. 

19. To obtain these data link to the EIA Website at http://www.eia.gov/dnav/pet/pet_pnp_unc_dcu_nus_m.htm and select the 

respective “View History” options for the “Operable Capacity (Calendar Day)” and “Operable Utilization Rate (%)” entries.