US households are facing a longer strain from elevated grocery prices as the conflict in the Middle East weighs on inflation. Now, agricultural commodities are set to cause prices to rise even more. Arlene Aspray has been following the impact of rising input costs to agriculture. Inez.

Yeah, Josh, and August really saw a rally when it comes to agricultural futures. And these are the inputs that go into staple foods. For example, wheat, it saw double digit percentage gains, the biggest gains in one month in years. Also the same situation with corn where corn saw its biggest one-month gain in about five years. You also saw sugar that went up, soy beans, soy bean oil as well. So these are these uh inputs that are put into foods and uh companies buy these, the food processors buy these about one to two months ahead of when they go into the prepared food. So you can imagine that the lag that it there's a lag window when it comes to increasing prices, but eventually these prices do get passed down to the consumer. And so I spoke to one source that told me that he's expecting food prices, retail food prices to increase by around the second quarter of next year, a little bit sooner perhaps or a little bit later, but nevertheless within that window. When we talk about food inflation, we saw in the latest CPI report when it comes to July, you saw that uh food was up 3.4% in July, that was an annualized rate. You saw food at home that was up 3% year over year and food away from home 2.7%. So you are still seeing food inflation and this only exacerbates the situation as we have seen these agricultural commodities that have been going higher. A large part of this has to do, of course, with oil prices that are higher with the straight of Hormuz where you don't see fertilize where less fertilizer is going through that passageway, less oil is going through that passageway. And remember that these agricultural commodities touch this there's various touch points when it comes to these commodities, when it comes to fertilizer, when it comes to the energy that is also needed to grow these foods.

Are are there any future risks ahead, Inez? Like how serious is the El Nino weather pattern on on agriculture?

That's had an impact as well uh because you have had heavy rainfalls in the Midwest and that's very rare and that is uh has impacted corn crops in the Midwest and in Ohio, also in the south, risking wheat. and then you have in other parts of the world like in South America, you've had uh quite a bit of rain in Brazil that has impacted wheat. It's also impacted soybean fields in Argentina. And then on the other spectrum, you have droughts in other parts of of the world as well. So El Nino is definite has definitely impacted crops, whether it be too much rain or droughts.