Posts Tagged “retail price inflation”
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.
From now into 2019 low retail price inflation is anticipated for fresh fruits and vegetables, according to a USDA report. Also, FreshCloud has been introduced by AgroFresh.
In the recently released Food Price report, the department notes fresh vegetable prices fell 0.2 percent from May to June, and now are 0.8 percent less than in June 2017. The USDA reports retail fresh vegetable prices are expected to remain steady with last year, changing between -0.5 to 0.5 percent in 2018 and then increasing 1.5 to 2.5 percent in 2019.
Prices for fresh fruits fell 1.2 percent from May to June but are up 1.9 percent compared with June 2017. The report said that despite citrus prices rising 2.3 percent, prices for apples and bananas fell 0.4 percent, and prices for all other fruits fell 4 percent from May to June.
The USDA forecasts fresh fruit prices to increase 1.5 to 2.5 percent in 2018 and rise 2 to 3 percent in 2019.
The report observes farm level fruit prices are forecast to drop between 2.5 to 3.5 percent and drop another 3 to 4 percent in 2019. Farm-level vegetable prices are forecast to drop between 6 and 7 percent this year and decline an additional 2.5 to 3.5 percent in 2019.
AgroFresh Launches FreshCloud
AgroFresh Solutions Inc. of Philadelphia has launched a new tool to predict the freshness of produce.
Known as the FreshCloud platform, the tool uses data to monitor produce quality through the supply chain, according to a news release.
The release notes the new technology will allow users to predict produce freshness, quality and optimal consumption timing.
AgroFresh recently acquired Verigo, whose technology will help AgroFresh improve fruit quality, leading to less food waste.
“As the world becomes increasingly data-driven, our commitment to high-quality fresh produce requires not only the best chemistry and expertise, but also the best information technology to ensure freshness across the supply chain and increased logistical efficiency to minimize waste,” AgroFresh CEO Jordi Ferre said in the release.
Verigo’s technology forms the foundation of FreshCloud Transit Insights. The acquisition also revamped AgroFresh’s AdvanStore offering, now called FreshCloud Storage Insights.
FreshCloud Predictive Screening, part of the FreshCloud platform, will predict the risk of disorder development during storage by analyzing gene expression at commercial harvest.
Price inflation has slowed to a crawl in 2015 for retail fresh produce.
Little or no inflation this year is expected for retail fresh fruit prices, while the top end of retail fresh vegetable price inflation is just 1.5%.
The USDA’s Economic Research Service reported in late July that the agency’s updated forecast for retail price inflation for fruit is now in a range 0% to 1% for 2015, rising to 2.5% to 3.5% next year. For fresh vegetables, the USDA predicts retail prices will increase from 0.5% to 1.5% and rising 2% to 3% next year.
Retail price inflation for fresh fruits in 2014 was 4.8%, while fresh vegetable retail prices were off 1.3% compared with 2013. The 20-year average inflation rate for retail fresh fruits is 3% and 3.2% for vegetables.
Fresh produce prices will increase at a lower rate than the overall food price index. The agency predicts overall supermarket food prices will increase 1.75% to 2.75% this year, with higher inflation for beef and eggs. In 2016, the USDA predicts retail food prices will increase from 2% to 3%, in line with the 20-year average of 2.6%.
Though the California drought has not caused fresh produce inflation this year, the USDA said it could play a role in food prices next year.
“The ongoing drought in California could have large and lasting effects on fruit, vegetable, dairy, and egg prices,” the USDA said in the forecast. On the other hand, the agency said lower trending oil prices could cause lower production and transportation costs to be passed on to consumers.
The USDA said farm-level prices for growers are down compared with a year ago. The agency predicts farm level prices for vegetables will decline 4% to 5% this year, while farm-level fruit prices will sink between 5% and 6%. For 2016, the USDA predicts grower prices for fresh fruits will rise 1.5% to 2.5%, while grower prices for fresh vegetables will increase 1% to 2%.