Wholesale vegetable prices surged 23% in December and fruit prices jumped 15%, government data released Jan. 13 showed, a reflection of freezing weather the destroyed crops in parts of Florida.
The U.S. Labor Department, in its monthly Producer Price Index report, said finished consumer food prices rose 0.8% in December from November levels. More than three-fourths of that increase stemmed from the rise in fresh and dry vegetable prices, the department said.
The 23% jump was the largest increase of any finished goods category, according to today’s report. Wholesale vegetable prices are still down 5% from December 2009, while fruit and melon prices are up 3.9%.
The freezes in Florida led to shortages of some products, and state agriculture officials estimated growers suffered $273 million in damage.
“Weather related issues can cause relatively large month-to-month changes in produce prices and the freeze in Florida will have an impact on some produce over the next few months,” said Ephraim Leibtag, senior economist with the Department of Agriculture’s Economic Research Service
Rising fresh produce prices are contributing to accelerating food inflation that also reflects increasingly expensive meat. As increasing wholesale prices filter down to the retail level, consumers probably will pay more at the supermarket in coming months.
At the retail level, average U.S. prices for fresh fruits and vegetables rose 2.2% last month compared with December 2009, the largest year-over-year increase for December since 2007, according to a separate Labor Department report released today. Compared with November, December prices for fresh fruits and vegetables were up 3.1%, the largest monthly increase since September 2007.
For the broader food at home category, retail prices during December rose 0.1% from November and 1.7% from December 2009, according to the Labor Department’s Consumer Price Index report.