According to the National Climatic Data Center, the drought has caused more than $10 billion in losses to agriculture and cattle, a number it expects to keep rising as the drought continues.
Meteorologists blame the drought on a La Niña weather pattern expected to last at least through the winter.
Crops most affected include corn and peanuts. In addition, the lack of rain dried cattle grazing pastures to dust, which has translated to higher beef prices.
"Yes, we are going to see higher prices this Thanksgiving," Purdue University agricultural economist Corinne Alexander told The Atlantic.
The American Farm Bureau estimates that a Thanksgiving meal for 10 will cost 13% more this year than it did last year.
The U.S. economy already has inflationary pressure as a result of the stimulative policies of the U.S. Federal Reserve pumping it with hundreds of billions of dollars.
"Ultra-low interest rates and excess money supply growth are what's been driving inflation," said Money Morning Global Investing Strategist Martin Hutchinson. "They raise commodity prices, which over time feeds into inflation in general."
Now the drought is pushing food inflation higher than overall inflation.
The Consumer Price Index (CPI) in September was up 3.9% over the previous year, while the increase for food alone was up 4.7%. Over the past five years, world food costs have risen 68%.
Earlier in the year, grocery stores were eating most of the price increases, somewhat insulating U.S. consumers. But in recent months that's begun to change.
"The era of grocers holding the line on retail-food cost increases is basically over," John Anderson, a senior economist at the Farm Bureau in Washington, told Bloomberg News.
The Biggest BitesPrices are going up the most dramatically in the categories of food most affected by the drought. Beef is up 10.1%, for instance.
With pastures drying up over the summer, many ranchers were forced to sell off cattle before they could reproduce. While that briefly increased the supply of beef, the current shortage of cattle - the U.S. herd was at a 38-year low this summer - is impacting prices.
The drought has caused the price of hay to skyrocket from $80 a ton to $200 a ton, which, because it's used as forage for farm animals, has contributed to a 10.2% spike in dairy prices.