Continuing high citrus prices have upped the 2014 inflation estimate for fresh fruit, but the California drought has had no influence on prices for fresh produce this year, according to a new report from the U.S. Department of Agriculture’s Economic Research Service.
Drought conditions in California have not translated to higher fruit and vegetable prices through May, according to the report. May was the first month in 2014 that overall fresh vegetable prices increased. With a 0.6% rise in May, fresh vegetable prices are up just 0.5% compared with May 2013, according to the report.
Annemarie Kuhns, economist with the USDA, said that commodities that could show drought effect price increases in future include vegetables, tree fruits, nuts and berries.
“We haven’t seen a discernible impact yet,” she said, though price lags between grower and retail prices take about a month to show up at the consumer level. A 27.7% increase in grower prices for lettuce in April may signal higher retail prices lie ahead for that commodity, she said, though the May retail price increase for lettuce was only 1.9%.
The report said that fresh fruit prices rose 2% in May and are up 7.3% compared with May 2013. The price boost has mainly been caused by citrus inflation, according to the USDA. Reduced harvest of citrus in Florida because of the citrus greening disease and the lingering effects of the winter freeze in California helped fuel a 3.8% price increase in May; the report said citrus prices are up 22.5% compared with May 2013.
The USDA forecasts fresh fruit prices to increase 5% to 6% in 2014. The department also has raised its inflation forecast for all fresh fruits and vegetables for 3% to 4% in 2014.
That rate of inflation is higher than the overall food price inflation forecast. For food-at-home and food-away-from-home, inflation is expected to range from 2.5% to 3.5% over 2013 levels, according to the report. The moderate inflation this year comes after very low inflation in 2013; the food-at-home Consumer Price Index increased 0.9% in 2013 compared with 2012, one of the smallest year-over-year increases in decades.
Since 1990, grocery store prices have risen by an average of 2.8% per year, according to the report.