Posts Tagged “vegetable prices”

Estimate of Retail Price Inflation for Vegetables Increases

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Both retail and farm-level prices for fresh vegetables have been revised upward for 2019.

In the U.S. Department of Agriculture’s Food Price Outlook report of June 25, the agency reported that although fresh vegetable prices decreased 1% from April to May, prices are 5.2% higher than in May 2018. “The price indexes for all fresh vegetable components (potatoes, lettuce, tomatoes, and other fresh vegetables) continued to show strong year-over-year growth,” the USDA said in the report.

“Following a 1.1% increase in 2018, this month’s forecast for fresh vegetable prices has again been revised upward, with expectations for an increase in a range between 3% and 4% in 2019.”

The USDA said the index of farm-level vegetable prices increased by 3.6% in May and was up 9.6% since the same time last year. The farm-level vegetable producer price index declined 1.7% in 2018, but the USDA now calls for an increase of 11% to 12% in producer prices for vegetables this year.

The USDA said the index for producer prices for fruit decreased 3.7% in May and was 15.9% lower since a year ago. After a decrease of 1.9% in 2018, the USDA said fruit prices at the farm level in 2019 are expected to decrease between 4% and 5%.

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Cost of Eating Out is Rising Faster than Eating at Home

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A8The cost of eating out is rising faster than eating at home.

The latest USDA Economic Research Service food price outlook reports restaurant food prices in October were up 2.5 percent higher than year-ago.

By contrast, the USDA reports food purchased at grocery stores was just 0.1 percent higher compared to a year ago.

“Between the 1970s and early 2000s, food-at-home prices and food-away-from-home prices increased at similar rates,” the report said. “Since 2009, however, food-at-home and food-away-from-home price growth has diverged.”

While grocery prices have shown signs of price deflation in recent years, restaurant prices have steadily increased.

In part, the different price responses are attributed to variations in the cost structure of restaurants versus supermarkets or grocery stores. Labor and rental costs are a bigger factor with restaurants than grocers.

For this reason, decreasing farm-level and wholesale food prices, which have exerted downward pressure on food-at-home prices, have had less of an impact on restaurant menu prices.


For 2018, the USDA notes retail food prices are expected to change between zero to 1 percent, below the 20-year historical average of 2.1 percent.

The USDA said while fats and oils, pork, nonalcoholic beverages, dairy, and processed fruits and vegetables could potentially decline in price, prices for beef and veal, poultry, fish and seafood, eggs, and fresh fruits and vegetables are expected to increase.

“Due to deflation in 2016 and 2017, expected price increases would still leave overall price levels in 2018 lower than in 2015,” the USDA said.

For 2019, the USDA said retail prices are expected to rise between 1 and 2 percent, which would mean the fourth year in a row with lower-than-average inflation.

Fruits and Vegetables

Retail prices for fresh fruits in October were down 1.5 percent compared with October 2017, with apple prices off 3.6 percent and banana prices were off 0.7 percent.

The USDA expects fresh fruit prices to increase 1 to 2 percent in 2018 and increase 2 to 3 percent in 2019.

Retail fresh vegetable prices in October were 0.7 percent higher than in October 2017. Fresh vegetable prices are expected to change between zero and 1 percent in 2018 and increase an additional 2.5 to 3.5 percent in 2019.

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Low Inflation Forecast for Produce

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DSCN4665Fresh 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.

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Kansas Legislation Would Kill Sales Tax on Fresh Produce

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DSCN5116Kansas Democrats and Republicans has agreed upon bipartisan legislation, which was recently been filed in hopes of making fresh food more affordable in the state.

Republican Senator Michael O’Donnell, and Democratic Senator Oletha Faust-Goudeau, both of Wichita, filed Senate Bill 263.  The measure would eliminate the state tax on fruits and vegetables.  The purpose is to encourage Kansans to eat healthier, plus it would support local farmers, as well small business owners who lose business across state lines.

Senator O’Donnell believes killing the sales tax on fresh fruits and vegetables would improve the health of everyone.  Research indicates a link between obesity and higher fruit and vegetable prices.  The higher prices make it more challenging for many families to eat healthy.

At 6.15 percent, Kanas’ sales tax is second highest in the nation behind Mississippi.   In addition to that, county and city governments can levy their own taxes, bringing the total as high as 9 percent in some areas.

Kansas has over 2.9 million residents and ranks 31st in population among the states.  It ranks 15th in geographic  size.

The most populous city in Kansas is Wichita (population 382,000), followed by Overland Park (174,000) and Kansas City (127,000) and Topeka (127,000).

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