Hefty Price Hikes for Fresh Food Amid Drought, Disease
Drought in Western states, citrus disease in Florida, and a cold winter in the Midwest are driving up food prices.
Drought, disease, and growing demand are contributing to rising food prices, with the U.S. Department of Agriculture reporting this week that the cost of food is up 2.5 percent since May 2013.
The federal government expects food prices to rise as much as an additional 3.5 percent in 2014, with heftier price increases expected for fresh fruits, vegetables, dairy, and pork.
Fresh fruits are expected to rise 6 percent, with oranges and other Florida citrus walloped by disease going up 22.5 percent compared to May 2013. Egg prices are up 10.1 percent since this time last year.
National Geographic spoke to USDA economist Annemarie Kuhns about the latest numbers.
Can you put these numbers in perspective?
Food price inflation for grocery prices was lower than average in 2013, increasing 0.9 percent. Overall, food price [inflation is] expected to return to levels that are closer to the historical norm [2.8 percent on average since 1990] in 2014.
Which prices will rise most?
Consumers will likely see higher pork prices, which increased 3.2 percent for two months in a row [12.2 percent since a year ago]. One of the reasons is porcine epidemic diarrhea virus, which has increased the number of piglets that die.
Both potatoes and lettuce had the highest rates of inflation, which contributed to the overall category of fresh vegetables going up in May. [Up to] 85 percent of the lettuce grown in the U.S. comes from California, which is suffering from ongoing drought conditions. We also saw a slight increase in exports and a slight decrease in imports last month, so there's a smaller supply of lettuce.
Fruit was really led by citrus [up 7.3 percent since May 2013] in Florida. That's because of the cold winter in Florida and the widespread citrus greening, a disease on the trees that causes [oranges] to fall off the tree earlier.
Dairy prices are increasing [up to 4 percent in 2014] due to really strong domestic demand for milk and cheese. There also was a cold winter in the Midwest, which harmed the hay production, lowering output per cow.
Is the current drought in the West to blame for higher prices?
It's too soon to tell. Some of the crop hasn't come to market yet. We just don't know how long the drought will last and how bad it will be and its effect on retail food prices. But we will be watching fresh fruit, fresh vegetables, and dairy that have large markets in California.
Now we've had drought in Oklahoma and Texas, so ranchers are being very cautious about expanding their herd size and we have been seeing higher beef prices.
The drought of 2012 impacted a lot of the feed crops, and as feed prices got higher, ranchers contracted their herd sizes. We're currently seeing herd sizes in the United States the same size as they were in 1951. That's a major decrease in supply when you factor in greater population as well as the higher foreign and domestic demand for beef.
What will consumers notice most at the grocery store?
The big takeaway is that at the periphery of the grocery store, the prices will be increasing at higher rates than your center aisle. So all your perishable foods—dairy, meats, fruits, and vegetables—will see higher-than-average food price inflation, whereas packaged food like sugars, cereals, candies, cookies, non-alcoholic beverages will be slightly below average.
This interview has been edited and condensed.
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