Hurricane Milton Could Send Food Prices ‘Sky High’

Hurricane Milton is expected to add to the economic woes brought by Hurricane Helene, which struck the Florida coast just over two weeks ago on September 26, according to the forecasters at AccuWeather.
Helene left a lasting mark, with its economic damage estimated to be between $225 billion and $250 billion. Now, with Milton closing in, Florida is once again at the center of a major storm disaster that could escalate into one of the country’s costliest hurricanes.
Particularly worrisome is the agricultural damage caused by the back-to-back storms, which, according to AccuWeather’s executive chairman Joel Myers, could see even more devastating losses than those caused by Helene.
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“Milton can result in significant losses of vegetables and fruit crops such as oranges and tomatoes, which can have an even greater impact than Helene on agriculture,” Myers said in a statement to the media on Monday.
“Price increases on some vegetables and fruits, such as oranges and tomatoes, could be seen at the grocery store within a couple of weeks.”
Milton’s expected destruction of crops and infrastructure could ripple through supply chains, driving food prices up at a time when inflation is already a pressing concern.
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One employee of Florida-based fruit grower and shipper Joshua Citrus Inc., who asked not to be named, told Newsweek that preparations are well underway for Milton’s arrival but that “if we lose the entire crop like we did in Hurricane Ian, the price of oranges will go sky high.”
Myers, meanwhile, warned that Hurricane Milton has the potential to become one of the U.S.’s most damaging and costly hurricanes, given the storm’s expected landfall in densely populated areas with expensive properties.
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While the storm is unlikely to trigger a flooding disaster in the southern Appalachians, its economic toll could still rival Helene’s, further straining an already fragile U.S. economy.
Should Milton cause total damage and economic losses exceeding $200 billion, the combined effects of the two hurricanes over just three weeks could amount to a staggering 2 percent of the country’s GDP.
Such losses could create challenges for the Federal Reserve as it navigates the delicate balance between curbing inflation and supporting an economy reeling from consecutive natural disasters, Myers said.
“On the one hand, the Federal Reserve raises interest rates to reduce inflation. However, the storms cause inflation by increasing the costs of goods,” Myers said.
“On the other hand, the hurricanes are harmful to the economy causing some businesses to fail and others to struggle as a result of the disasters, so jobs are being lost, and people and businesses are facing a long tail of economic impacts from the disasters.”
The Federal Reserve is reportedly weighing up more interest rate cuts this year, but the destructive hurricanes add uncertainty to their decision-making. Normally, a weakening economy would lead to lower interest rates, yet the inflationary pressures caused by the storms might necessitate the opposite approach.
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