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.