Vegetable prices have been more than twice as volatile as the average of all other food purchased since 1990, according to a new U.S. Department of Agriculture report.
The December USDA Economic Research Service Vegetable Outlook report said the standard deviation for annual change in vegetable prices is 3.7%, compared 1.2% for food at home.
Fresh vegetables are particularly volatile and have trended higher than overall food prices since 1990, according to the USDA. Between 1990 and 2011, fresh retail vegetable prices rose by 113%, significantly higher then the 71% higher prices for the typical grocery shopping basket. The USDA said the annual average change in retail fresh vegetable priced is 3.8% since 1990, compared with 2.8% for all food purchased for home consumption.
For 2012, fresh vegetable volatility has been reflected in sharply lower prices compared with year ago levels. Mild winter weather in Florida and other winter vegetable growing areas created a bumper crop and lower prices in early 2012 and prices since then have stayed reasonable. The latest food price forecast by the USDA projects the 2012 annual change in fresh vegetable prices at up to 5.25% lower, compared with a 5.6% increase in 2011 and 2% higher prices in 2010. The USDA projects 2013 fresh vegetable prices will resume their long term rise and increase 4% to 5%.
By comparison, fresh fruit prices are forecast to rise about 1% this year, compared with a 3.3% rise in 2011 and a 0.6% decline in 2010. For 2013, fresh fruit prices are forecast to increase up to 4%, according to the USDA.
While seasonality, fluctuations in demand, and shifts in production can create volatility, the unpredictability of weather makes forecasting fresh vegetable prices the most prone to error, the USDA said.