California drought to cause fruit and veggie sticker shock – ‘We predict the increased prices will change consumer purchasing behavior’

By Adam Shell   
16 April 2014

(America’s Markets) – The price of  fruits and veggies is going up, causing possible sticker shock at the grocery store checkout. Blame one of California’s worst droughts ever for the rising prices.

Crop shortages, ranging from 10% to 20% depending on the type of crop, will lead to the higher prices, says professor Timothy Richards of the W. P. Carey School of Business at Arizona State University, citing recently completed research on which crops will likely be most affected.

“You’re probably going to see the biggest produce price increases on avocados, berries, broccoli, grapes, lettuce, melons, peppers, tomatoes and packaged salads,” says Richards. “We can expect to see the biggest percentage jumps in prices for avocados and lettuce – 28% and 34%, respectively.”

Richards estimates the following possible price increases due to the drought:

• Avocados likely to go up 17  to 35 cents to as much as $1.60 each.
• Berries likely to rise 21 to 43 cents to as much as $3.46 per clamshell container.
• Broccoli likely to go up 20 to 40 cents to a possible $2.18 per pound.
• Grapes likely to rise 26 to 50 cents to a possible $2.93 per pound.
• Lettuce likely to rise 31 to 62 cents to as much as $2.44 per head.
• Packaged salad likely to go up 17 to 34 cents to a possible $3.03 per bag.
• Peppers likely to go up 18 to 35 cents to a possible $2.48 per pound.
• Tomatoes likely to rise 22 to 45 cents to a possible $2.84 per pound.

Industry estimates range from a half-million to 1 million acres of agricultural land likely to be affected by the current California drought. Richards believes 10% to 20% of the supply of certain crops could be lost. California is the biggest national supplier of several of those crops. For avocados, the state is the only major domestic source. […]

“We predict the increased prices will change consumer purchasing behavior,” says Sherry Frey, vice president of Nielsen Perishables Group. [more]

California drought to cause fruit and veggie sticker shock