Top Line
Lettuce and eggs saw the highest price increases of all foods and beverages through early 2024, while citrus fruit saw its prices plummet after recovering from a tough 2023, according to the Bureau of Labor Statistics’ most recent six-month data.
A man shops for vegetables next to romaine lettuce.
AFP via Getty Images
Key Facts
Lettuce prices rose 10.3% from November to May, according to Consumer Price Index data, partly due to supply shortages in California and Arizona caused by poor growing weather, Miguel Gomez, a food and agricultural economist at Cornell University, told Forbes.
Dawn Cermany, a professor at Colorado State University, said lettuce is tricky because it can only be grown in western states that struggle with water supplies and is labor-intensive, making it expensive to produce, especially in states like California that are raising their minimum wage and potentially passing those costs on to consumers.
After lettuce, eggs had the biggest increase at 9.5 percent, but Gomez said that could be the result of suppliers over-adjusting prices after high prices last year, while Tilmany said it could also be related to recovery from the recent impact of avian flu on egg-laying farms and supplies.
Citrus fruits — oranges, mandarins and apples — were three of the five crops with the biggest declines. Gomez said strong citrus growing season in the U.S. this year has created a surplus of domestic supply on top of what’s already being imported from other countries, upending a tough 2023 for citrus.
Tilmany agreed with Gomez that prices for some fruit have fallen, adding that there are “very good growing conditions” for winter crops such as citrus, which could lead to lower costs.
Food and beverage items with the biggest price increases (November to May)
Lettuce, up 10.3% Eggs, up 9.5% Tomatoes, up 3.9% Other condiments, up 3.9% Other beverages including tea, up 3.2%
Food and drink items with the biggest price drops
Citrus fruits, down 7.8% Apples, down 6.2% Other uncooked poultry, including turkey, down 4.1% Oranges, including mandarins, down 3.9% Potatoes, down 3.6%
Big numbers
0.9%. This is the overall increase in food and beverage prices across U.S. cities from November to May. Overall, inflation was 1.7% across all items.
Points to note
When asked what consumers can expect later this year, Cermany said shoppers may need to set their expectations appropriately. “I think people need to realize that prices aren’t going to go back to what they were,” she told Forbes. “But I don’t think we’re going to see this continued price hike again.”
Amazing facts
According to the CPI data, just four food items showed no price change over the past six months: cereals and bakery products, bread, poultry, and primary and secondary school foods. Gomez told Forbes that bakery products and cereals were likely holding steady because markets for key ingredients like grain crops remained “relatively stable” through the first half of the year.
Main Background
After years of high inflation, partly due to the COVID-19 pandemic, inflation has begun to ease over the last year and this year, and food prices, which are usually volatile, are no exception. Overall year-over-year inflation was 3.3% in May, an improvement compared to the same months in 2023 (4%) and 2022 (8.6%). Factors such as supply chain issues and wholesale prices caused food prices to rise less sharply in the United States last year compared to 2022, when the overall increase was 9.9%. In 2023, the overall increase was only 5.8%, according to the USDA. Eggs are the main driver of the inflation rise Americans are suffering from, with the average price of a dozen eggs in the United States last January at $4.25, more than double the previous year. This is because avian flu hit supplies. Food inflation has become a top concern for many voters heading into the November election. A recent Ipsos poll of voters in battleground states found that a majority of voters believe inflation and rising prices are the most important issue facing the country. Despite the concerns, the USDA expects food inflation to continue to slow through the year, rising modestly in aggregate to about 2.2%. Inflation for groceries and other at-home food purchases rose just 1% year-over-year in May, while restaurant purchases and other eating out rose about 4% year-over-year, according to the Consumer Price Index.
What we don’t know
The expected impact of Ozempic and other appetite suppressants on food prices. Tilmany noted that some foods that have seen a big increase in price are perceived as more nutritious and healthier, like lettuce and eggs, while some foods that have seen a price drop, like apples and potatoes, are perceived as high in sugar and carbohydrates. As people’s food preferences shift, “some in the food industry are concerned that demand for their products is decreasing,” he said, which could lead them to lower prices to stay competitive.
References
Forbes Trump Leads Biden in All Seven Battleground States; New Survey Shows Inflation and Immigration Are Voters’ Top Concerns; By Sarah Dorn Forbes 4th of July Barbecue Inflation Guide: Prices for these dishes are rising, but here’s where you can save; By Molly Bohannon
Source link
