Retail prices for fresh vegetables jump

04/15/2011 04:18:56 PM
Bruce Blythe

Retail prices for fresh vegetables in March posted the biggest increase since 2008 in the wake of freezing weather that destroyed crops in key growing areas of Mexico and the Southern U.S., leading to shortages of some products.

Average nationwide vegetable prices rose 9.8% in March compared to the same month in 2010, according to the Bureau of Labor Statistics’ monthly Consumer Price Index report April 15.

That was the largest year-over-year increase for any month since vegetable prices jumped 10% in September 2008.

Compared with the previous month, fresh vegetable prices in March were up 4.7% following a 6.7% gain in February, as potatoes, lettuce and tomatoes “all posted significant increases,” the bureau said in the report.

Earlier this year, the first killing freeze since the 1950s struck southern Sinaloa, Mexico’s primary supplier of winter vegetables, cutting supplies of tomatoes, bell peppers and other crops. Unusually cold weather also hurt lettuce crops in Arizona and citrus groves in Florida.

Higher fresh produce prices are contributing to accelerating food inflation that’s forcing Americans to pay more at the grocery store even as unemployment remains high. Rising export demand for U.S. farm products and oil’s rally above $100 a barrel are also contributing to food inflation, analysts say.

“We have seen higher rates of growth in consumer food prices during the past few months, and we expect these to continue for some time,” Daniel Madison, an analyst with the University of Missouri’s Food and Agricultural Policy Research Institute said.

“Basic commodity prices have experienced large jumps in the past year, and many of these increases are just now beginning to show up in retail food prices, as it takes some time, especially in a difficult economy, for retailers to pass along their higher purchasing costs to consumers,” Madison said in an April 15 e-mail.

The Bureau of Labor Statistics’ price index for food consumed at home last month rose 1.1% from February and 3.6% from March 2010. Overall, food inflation this year is on track to rise by the second-largest pace in the past two decades, according to a government forecast.

While vegetables became more expensive last month, a recent upswing in fruit prices eased. For fresh fruits, average U.S. prices last month were down 0.5% from February and down 1.5% from March 2010.

Among specific products, field-grown tomatoes averaged $2.09 a pound nationwide at retail last month, up 14% from $1.83 in February and up 4% from $2.01 in March 2010, according to the bureau. Iceberg lettuce averaged $1.28 a pound, up 12% from February and up 49% from March 2010.

While food and energy costs have increased in recent months, overall inflation remains subdued.

Excluding food and energy, the CPI last month rose 0.1% from February and 1.2% from March 2010. The CPI also includes costs for apparel, medical care, housing and other goods and services.



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