Posts Tagged “produce prices”
RaboBank has released its North American Agribusiness Review for February 2023, provided a market outlook on several products for this year, including fruits and vegetables, considering a disinflationary process that has started in the U.S.
The report indicates that: “The disinflationary process is going to take a significant amount of time. Therefore, we do not expect the Fed to cut rates in 2023, despite our forecast of a recession in the second half of the year. The Fed will have to keep rates high to squeeze inflation out of the economy.”
However, at least for products like fresh vegetables, seafood, and milk, prices have already started to drop from the beginning of the year.
After a year where food inflation reached double digits, consumers will be happy to see some decrease in grocery prices in general by mid-year.
Fruits
The report analyzes a couple of fruits in the market individually. Avocados have seen a consistent decrease in price since Sept. 2022 by almost 50% year-on-year. With record-setting crops and high volumes from Mexico, prices have dropped considerably.
On the other hand, apple prices have increased caused of shorter crops in WA, causing low availability of some varieties. By mid-February, some non-organic varieties reported up to 53% price increases year-on-year.
Strawberry prices also increased 11% year on year with increased demand, the report shows, however, that a record high acreage planted in California gives hope that availability will improve during 2023 and prices may normalize.
Orange and lemons, showed a 5% and 7% decrease in shipping point prices, a consequence of California’s increased citrus production.
Vegetables
Vegetable prices are expected to decrease, slowly but surely, as supply pressures ease.
“In January, the fresh vegetables CPI was the fastest dropping index at 2.3% month-on-month, showing retail prices reacting to upstream’s price ease,” said the report.
Potatoes seem to be the most complicated product, with the lowest production since 2010 with just 397m cwt. As a consequence, prices have reached a historic high, with a 75% increase year-on-year.
In general, prices for carrots, celery, cucumbers, sweet corn, and bell peppers, are all up year-on-year caused by a combination of short supplies and strong demand.
Consumers should expect lower prices, but it won’t be a quick process, so experts ask for patience when it comes to buying fresh produce at your local grocery store.
As inflation remains and fresh produce prices increase, consumer habits have been changing. In July 2022, fresh produce sales were up 4.2 percent, but volume sales were down 4.8 percent, compared to July 2021.
“Inflation, COVID and consumer mobility continue to change shopping and consumption patterns,” said Joe Watson, VP, Retail, Foodservice & Wholesale for IFPA, in a report by 210 analytics.
“The consumer reactions to the current environment combined with supply side volatility are keeping all of us on our toes to understand the latest trends and quickly pivot accordingly,” he added.
In July, inflation was up 15.3 percent for grocery and 12.6 percent for perishables, so on the whole, fresh produce prices were up from last year, at 8.5 percent level on a per-unit basis and 9.5 percent on a per-pound basis.
In addition, the price per unit across all foods and beverages in the IRI-measured multi-outlet stores accelerated further to an increase of 13.3 percent in the five weeks ending July 31st, 2022, versus a year ago.
Moreover, fresh produce sales reached $7.7 billion, surpassing the record set the prior year by 4.2 percent. Fresh fruit added $163 million in sales and vegetables added $147 million when compared to July 2021.
Gains were achieved in many different ways. Avocados, peaches, nectarines and plums had very high inflation, while pineapples and apples had below-average inflation, but robust demand pushed their performances into the top 10 in absolute dollar growth in July.
The fresh share of the produce business has continued to rise steadily and while summer is a top season for fresh produce sales, July 2022 shows that consumers are not switching out of fresh produce because of inflationary concerns.
However, overall, fresh produce pound sales trailed behind year ago levels all throughout 2021 and continue to do so thus far in 2022. In July, pound sales were down 4.8 percent year-on-year.
“Volume sales were a mix with increases for berries and pineapples but down results for all other top 10 sellers,” said Jonna Parker, Team Lead Fresh at IRI.
Berries continued to be the fruit category’s best seller in July. However, unlike in the month of May, where berry sales continued to be more than double that of melons, Parker said: “the gap with the number two, melons, was by far not as big as we’ve seen.”
“In part this has to do with below-average inflation, but we also saw cherries come on strong and mixed fruit moving back in the top 10 sellers due to the Fourth of July sales spike,” she added.
On the whole, compared to 2019, pre-pandemic, prices across all foods and beverages were up 25.2 percent. Dollars remained 17.7 percent ahead and pounds stayed just above 2019 levels by 0.7 percent. Therefore, despite experiencing some volume pressure in the early months of 2022, fruit pulled even with 2019 levels on much better prices in July.
Considering the outlook for fresh produce, Parker commented: “Back-to-school shopping is in full swing and that brings about many healthy produce snacking campaigns at retailers around the country in addition to the final weeks of grilling season.”
Fresh fruit and vegetable retail prices in 2012 were generally lower, according to a recently released government report.
The U.S. Department of Agriculture’s Economic Research Service reports lower fruit and vegetable prices resulting in overall retail prices for food being kept in line through October this year.
From January through October , average food-at-home prices have been flat because deflation in the fresh fruit and vegetable arena and lower prices for milk and pork, the USDA ERS said in a food price outlook report issued in late November. By contrast, beef, veal, poultry, fat and oil prices have been higher.
The inflation forecast for both all food and food-at-home prices in 2012 is 2.5 to 3.5 percent. Lower prices were particularly pronounced for vegetables in 2012, according to the USDA ERS.
The fresh vegetable consumer price index increased 0.6 percent, however it has dropped about every month in 2012. Compared with 2011 year ago, fresh vegetable prices are down 3.2 percent on average, due primarily by a 10.9 percent drop in potato prices, a 4.1 oercent decline in lettuce and a 1.7 percent slide in tomato prices. Other fresh vegetable prices were down 0.7 percent.
Warmer weather and favorable growing conditions in 2012 combined to increase yield and lower prices compared with year-ago levels.
An expected seasonal increase in prices during the second half of 2012 has been less than predicted, and because of that the USDA now expects fresh vegetable prices to fall 4 percent to 5 percent in 2012. The fresh fruit price index is up 2.1 percent from October 2011, and the USDA projected fresh fruit prices for 2012 are now projected to fall between 1 percent and 2 percent.
Compared with October 2011, the USDA said retail apple prices are up 6.4 percent, with banana prices 1.4 percent lower, citrus prices 0.1 percent higher and other fresh fruit commodities up 1.3 percent in retail price.
Prices increases overall of 3 to 4 percent for fresh produce is projected in 2013 by the USDA. The agency sees an increase of 3 to to 4 percent for fresh fruit and 4 to 5 percent for fresh vegetables.
Overall food price inflation for 2013 is projected between 3 and 4 percent. Prices for food served away from home are projected to increase 2.5 to 3.5 percent in 2013, while prices for food served at home are expected to increase 3 to 4 percent.