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Page added on April 16, 2014
Fruit and Vegetable Prices Are Rising
Grocery shoppers may soon need more green in their wallets to afford their next salad.
The cost of fresh produce is poised to jump in the coming months as a three-year drought in California shows few signs of abating, according to an Arizona State University study set to be released Wednesday.
The study found a head of lettuce could increase in price as much as 62 cents to $2.44; avocado prices could rise 35 cents to $1.60 each; and tomatoes could cost 45 cents more at $2.84 per pound. (The run-up in produce prices is in line with other projections showing that overall food cost gains are expected to accelerate this year.)
The latest projections were compiled by Timothy Richards, an agribusiness professor at ASU’s W.P. Carey School of Business. He studied the drought’s effect on farmland and consumer purchasing trends to determine the eight fresh fruits and vegetables likely to see the largest price increases this spring and summer.
And the price increases may already be happening. Grocery prices rose by 0.5% for the second-straight month in March, according to the Labor Department’s consumer-price index, released Tuesday. It was the largest two-month gain in the food-at-home category since 2011. Fruit and vegetable prices rose 0.9% last month, after a 1.1% gain in February. Meat and dairy prices are also increasing. Meanwhile, overall consumer prices rose just 0.2% last month, as broader inflation in the economy remains tepid.
California is the largest domestic producer of each of the products Mr. Richards identified, ranging from grapes to peppers. And in the case of avocados, it’s the only state with a significant crop.
The drought has wiped out between 10% and 20% of California crops for the eight items, but the size of the expected price increases varies widely. Lettuce prices could jump as much as 34% and avocado prices could rise 28%, the largest projected increases.
“People are the least price-sensitive when it comes to those items, and they’re willing to pay what it takes to get them,” Mr. Richards said. “It’s hard to make a salad without lettuce.”
In basic economic terms, the drought reduces supply, which puts upward pressure on prices. But how high the price can rise is determined by consumers’ willingness to pay more against their ability to find a substitute.
Packaged salads, for example, would increase in price by only 13%, even though many of the ingredients in them are projected to increase in cost by a greater percentage. That’s because consumers view premade salads as a “luxury” good and would readily switch to lower-cost alternative if the price gets too high, Mr. Richards said. They could chop the lettuce themselves or buy frozen vegetables.
The impact could spread beyond the produce aisle. Items such as lettuce, tomatoes and peppers are commonly used in deli sandwiches and salsas, among other products. The drought could also cause those items to cost more.
Still, the run-up in prices is likely to be somewhat temporary, Mr. Richards said. When prices increase, farmers outside of California, including foreign suppliers, will be incentivized to ship more crops to the U.S. That will in turn put downward pressure on costs.
But with water-supply problems expected to persist for years, California farmers will have some difficult choices to make, he said. They’ll need to determine which crops should receive the limited amount of available water, and which should be allowed to fall away.
“We could be looking at future,” he said, “where California is no longer bread basket for the country.”
18 Comments on "Fruit and Vegetable Prices Are Rising"
Stilgar Wilcox on Wed, 16th Apr 2014 5:42 pm
All these food prices rising is just part of the red queen syndrome. We drill ever more wells to frack while we run our butts off ever faster to pay rising bills for anything and everything, but yet according to the Fed there isn’t enough inflation. But then again inflation does not include food or energy. How convenient!
Our garbage pick up use to be 120 bi-monthly, now it’s 220. Water/sewer use to be 105, is now 185 bi-monthly. Fuel use to be 2.10 a gallon is now 4.05. Summertime utility use to cost about 185 a month (for AC etc. in hot weather) is now 385. An organic apple use to be 1.95 a pound is now 3.98!
Run faster red queen just to stay in the same place! Hurry!!!!!!!!!!!
ghung on Wed, 16th Apr 2014 6:15 pm
This is actually good news for local and home-based food production. We grow everything on the list except avocados, and will gladly share or sell to the local produce stand, or at the community market. I bought two new fig plants yesterday and am on my way to get some nice apple trees being discounted at the local grocer. I planted a new perennial herb bed in the kitchen garden and the tomatoes are ready to go in this weekend (frost predicted tonight). Knowing how to preserve all of these things will also help with seasonal availability.
Back to the garden, after a lunch of a sliced venison sandwich with fresh lettuce, a fine tabasco dill pickle and spring water, all sourced within a few hundred yards of here (excepting the bread flour, vinegar, and salt). There’s a group of wild turkeys in the lower yard, but I’ll give them a pass for today.
I love our wild-caught North Carolina shrimp, but it has gone up from $9/pound to $18 in about two months. Maybe I’ll start on my crayfish aquaponic system soon. Greens with crayfish salad sounds good.
paulo1 on Wed, 16th Apr 2014 6:58 pm
Yeah, you spoke for me again Ghung. I was going to say this has hit just before gardens are starting to produce. I could mention that tonight we are having our home grown chicken with green salad (from the greenhouse), and last years fingerling potatoes, oh shoot, I will. And tomorrow we will have salmon.
If I lived in an apartment in the city I would at least have a sprouter on the counter. At least one could produce greens for a sandwich on decent home made bread. For those that have some property, even a town sized lot, quit whining and get to work and put in your garden. Drop the golf clubs and pick up some garden tools.
Paulo
orbit7er on Wed, 16th Apr 2014 7:06 pm
Our family signed up for our second year of local Community Supported Agriculture vegetables and fruits grown only about 8 miles from my house. Last year we got so much every week we cut our share this year. We froze a lot of the extra from last year. Our veggies are already paid for 😉
Davey on Wed, 16th Apr 2014 7:39 pm
G/Paulo, just got out of my garden. Had to uncover the apple trees. We had a hard freeze last two nights and today high winds. Friggin weather has been tough this winter. I have some awesome tomatoes I started from seed under the grow lights ready to go in. Lettus, spinach, arugula, kale, chard, potatoes, and asparagus, are in. Strawberries are looking great. I am excited about spring if it would ever get here and stay!!
Northwest Resident on Wed, 16th Apr 2014 8:23 pm
My backyard project is looking better and better. My newly bought layer chicks are growing fast and loving their new coup. I’ve been a sod-churning demon with the shovel almost every day for the last couple of weeks, installing about 1000 sq feet of raised planters. Digging is tough enough, but lately I’ve been working an area close to where I had to cut down some big alder trees — I’m now using the axe to hack and chop those big roots out. I thought I was going to have to buy some loam and/or topsoil, but as it turns out, the area where I live is an ancient river flood plain and the soil here is so awesome (fine sandy loam) that other soils in the state of Oregon and elsewhere are compared to this soil. I’ve got all kinds of berries and two types of grapes planted and going good with trellises installed, and my thousand or so seeds are starting to take off. This is my first year so I don’t know how well I’m going to do, but I’ve been reading/studying constantly for about six months now and I think I’m going to get a bunch of produce. Wish me luck. On my grow list:
Garlic
Mammoth Sunflower Seed
Ferry-Morse Sweet Corn
cucumber
cabbage
Jalapeno M Hot pepper
Long Thin Cayenne Hot pepper
Pinto bean
tomato
Bush Beans
Blackeye cowpea (black-eyed bean)
Jubilee corn
asparagus
kale
Sugar Snow Peas
Sweet Spanish yellow Utah Jumbo onion
Half Long carrot
Strawberries
Russet Potatoes
Sweet Potatoes
Rye
Barley
Red Clover
and a couple other cover crops
My wife thinks I’m overdoing it… 🙂
Davey on Wed, 16th Apr 2014 8:44 pm
NR next month my cucumbers, melons, zucchini, bush beans, turnips, carrots, sweet corn, flour corn, and ornamental corns all go in. I am hoping for a good wild blackberry crop. Maybe next year I will do grapes!
ghung on Wed, 16th Apr 2014 8:52 pm
Yeah, we may not feed the world, but perhaps our little parts of it. I’m running a water line to our new raised beds. Love having irrigation available since I’m a lazy gardener. Using simple PVC pipe with holes drilled in it, on timers (see youtube: the Mittleidner method. I use small drippers for our containers. Not sure how this sawdust/sand mix is going to work, but figure it’s worth a try since the big garden doesn’t get any easier as these bones get older.
Northwest Resident on Wed, 16th Apr 2014 9:04 pm
Davey and ghung and paulo1 — It is very interesting to hear about your gardening/farming efforts. I hope we’ll have a chance to share stories and compare notes as the growing season progresses. Once I get everything fully installed, built and planted and the plants start going good, I was planning to take some photos and put them somewhere where I can post a link that you or others might be able to visit. Hopefully, you all might consider doing the same.
ghung — Yeah, some kind of dripper type irrigation is in the plans, but that has to come later — much later. Till then, it is a 100 foot water hose. My ultimate plan is to drill my own irrigation well (about 10 – 12 feet down), install a hand pump, pump a holding tank full of water once a day and have it set up on dripper lines to water the entire garden. Big plans!
Davey — I transplanted a bunch of blackberry bushes along my back fence, to reinforce the impassibility of that back fense area for one thing and to hopefully get a bunch of blackberries too. My mom used to make world famous blackberry jam, and I’ve got her recipe. Besides being delicious, blackberries are exceptionally nutritious as you know. Tastes good, healthy — win/win.
Flour corn — hmmmm. I’ve got a grinder/mill for grinding wheat berries into flour, and I imagine I can grind corn into corn flour. But is there a special type for corn for that??? First I’ve heard about that.
Sweet potatoes — grow them if you can. They store well for a year or more without a lot of effort, and amongst the various veggies/fruits that you can grow, they are probably the most nutritious all around. I’m going to have to implement some special procedures to grow sweet potatoes here in the cooler NorthWest climate, but others are doing it — just takes work, materials and a little bit of smarts.
Davey on Wed, 16th Apr 2014 10:07 pm
Yeap NR forgot sweet potatoes. On my list for this weekend. G, I have a pond 50 yards in back and above the low part of my garden where my corn will go. I am planning on doing the irrigation you spoke about. I have I pipe that runs through the dam and comes out the bottom. I also have a well spigot.
ghung on Wed, 16th Apr 2014 11:22 pm
Thanks all.
@NR- It’s easy to use photobucket or other sites to share photos. Here are some shots of previous years’ progress including our water system. We originally used the pond, but found the water tended to foul the small PV-powered pump and irrigation systems (grew algae), so I tapped a spring above the garden. All of the stuff I used was salvaged or bartered for, except a few fittings.
h ttp://s1001.photobucket.com/user/Ghung/slideshow/pvwaterstuff
This year I’m going to try the Mittleidner method (modified) for sweet potatoes, like this guy:
h ttp://www.youtube.com/watch?v=XhcbQ8X_JqY
GregT on Thu, 17th Apr 2014 12:25 am
Ghung,
Photobucket says that the album is private?
yellowcanoe on Thu, 17th Apr 2014 1:08 am
Not to worry — Statistics Canada and its US equivalent will continue to insist that the cost of living index is increasing at a very low rate.
Northwest Resident on Thu, 17th Apr 2014 2:26 am
ghung — Like GregT, I get “This album is Private.” But yeah, Photobucket, I can’t wait to post some pics too.
ghung on Thu, 17th Apr 2014 2:37 am
@GregT – Thanks! I think I fixed it.
h ttp://s1001.photobucket.com/user/Ghung/slideshow/pvwaterstuff
Makati1 on Thu, 17th Apr 2014 2:42 am
I hope you are growing heirloom veggies and fruits and saving the seeds … hybrids don’t breed true and the local seed store may not be there next year.
ghung on Thu, 17th Apr 2014 3:18 am
Thanks, Mak. This is the Appalachians. We’ve been trading seeds for centuries. Even my raspberries came from an old homestead that was abandoned about 80 years ago. That said, I’m not a purist. I’ll try anything that puts food on the table. Keeping our options open…
Northwest Resident on Thu, 17th Apr 2014 6:36 pm
ghung — Nice setup! Thanks for sharing the pics. Growing veggies in large garbage bags — who would’ve thunk it?!