Fresh produce price inflation will be low again in 2015 as it resists California’s drought, the USDA’s Economic Research Service has forecast.
The agency recently reported fresh fruit prices will increase just 2.5% to 3.5% this year, and fresh vegetable prices will rise 2% to 3%.
In May, the USDA said fresh fruit prices rose 1.7% compared with April, but were down 5.7% from May 2014. Fresh vegetable prices were 0.2% lower in May compared with April but up 1% compared with a year ago, according to the USDA.
For all food items, the Consumer Price Index for food was unchanged from April to May but 1.6% above year-ago levels.
In 2014, food price inflation was close to the 20-year historical average of 2.6%, despite the effect of the drought in the Southwest and California.
While the ongoing California drought could have “large and lasting effects on fruit, vegetable, dairy and egg prices,” the USDA at this time projects overall food-at-home inflation of about 1.75% to 2.7%.
If oil prices continue to fall or remain low this year, projected decreases in production and transportation costs may be passed along at the retail level, according to the USDA.