Fuel price spike effect on produce prices studied

12/11/2013 04:00:00 PM
Tom Karst

The study found that commodities with larger import shares generally exhibit less fuel price sensitivity, with the authors concluding that is because ship transport is considerably less energy-intensive per mile than trucks. Studies have shown that trucking uses more than 13 times more energy per-mile per-pound shipped than does ocean shipping.

Rail fuel efficiency is almost as good as ocean shipping, and Volpe said the study makes it clear that the incentives of produce price stability and price predictability favor more rail transport of fresh produce.

“To the extent that the fuel price share of produce prices can be reduced, that’s one major step to reducing price volatility, which should improve welfare,” he said. “There are incentives to move in that direction, but that’s not to say it is going to be easy.”

Volpe said more research is needed, particularly on the link between increases in fuel prices and changing retail prices.

Finding precise data from the retail sector will be more challenging, but Volpe said he believes more research is possible.


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