MONEY

California drought to push produce prices higher

Peter Corbett
The Republic | azcentral.com
  • California growers could lose between 10 and 20 percent of the supply of certain crops
  • An estimated 1 million acres of agricultural land in California will likely be impacted by the drought
  • Avocados, berries, broccoli and lettuce are among the crops that will see price increases

Drought conditions in California's agricultural fields are going to push prices higher for fruits and vegetables, according to a Arizona State University study.

Drought conditions in California’s agricultural fields are going to push prices higher for fruits and vegetables, according to a Arizona State University study.

The biggest price hikes are likely for lettuce, up 34 percent, and avocados, up 28 percent, according to Professor Timothy Richards of W. P. Carey School of Business at ASU.

"You're probably going to see the biggest produce price increases on avocados, berries, broccoli, grapes, lettuce, melons, peppers, tomatoes and packaged salads," Richards said.

California growers could lose between 10 and 20 percent of the supply of certain crops. It is the main domestic source for avocados and the largest national supplier of other produce.

Thea agricultural industry in California estimates that up to 1 million acres of agricultural land is likely to be affected by the drought.

Richards analyzed retail-sales data from the Nielsen Perishables Group, an industry analytics firm, to estimate how much the prices might rise.

Those most vulnerable are the crops that use the most water and simply won't be grown, or those sensitive to reductions in irrigation.

Richard estimates these possible price increases due to the drought:

• Avocados up 17 to 35 cents to as much as $1.60 each.

• Berries up 21 to 43 cents to as much as $3.46 per container.

• Broccoli up 20 to 40 cents to $2.18 per pound.

• Lettuce up 31 to 62 cents to $2.44 per head.

• Tomatoes up 22 to 45 cents to $2.48 per pound.

"We predict the increased prices will change consumer purchasing behavior," said Sherry Frey, vice president of Nielsen Perishables Group.

Richards said the increased prices for California produce will force retailers to to buy more fruits and vegetables from Mexico and Chile, Richards said.