USDA doesn’t find drought price effect yet

08/27/2014 09:47:00 AM
Tom Karst

The California drought still hasn’t had a major effect on consumer-level fruit and vegetable prices, but economists at the U.S. Department of Agriculture say the potential remains for large and lasting effects on how much they cost.

Because of seasonal increases in supply, the USDA reported that fresh fruit prices fell 0.6% in July, but remained 5.7% higher than July 2013. July fresh vegetable prices fell 0.8% compared with June and are off 0.5% compared with July 2013, according to the USDA.

The retail inflation forecast for all fresh fruits in 2014 is 5% to 6%, up from 2% inflation recorded last year, according to the agency. For 2015, the USDA projects fresh fruit inflation at retail from 2.5% to 3.5% higher than 2014.

The USDA’s 2014 forecast for fresh vegetable inflation at the consumer level is 2% to 3%, compared with 2% inflation recorded last year. Retail prices for fresh vegetables in 2015 are forecast to rise 2% to 3% above 2014 levels, according to the USDA.

The retail inflation forecast for all food is 2.5% to 3.5% this year, followed by inflation of 2% to 3% in 2015.

Among food items, the USDA said that meat, poultry and fish prices are most volatile, forecast to rise 4% to 5% this year and 3% to 4% in 2015.

Since 1990, grocery store prices have risen by an average of 2.8% per year.

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