Shoppers can expect to pay more for certain groceries due to Calif. drought

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by Jennifer Thomas

Video report by Gary Harper

Posted on April 16, 2014 at 2:26 PM

Updated Monday, Apr 21 at 12:21 PM

PHOENIX – California's drought is impacting grocery store shoppers across the country, according to a professor at Arizona State University.

Professor Timothy Richards said shoppers can expect to see a short supply of certain fruits and vegetables in stores and to pay higher prices for those items.

"You're probably going to see the biggest produce price increases on avocados, berries, broccoli, grapes, lettuce, melons, peppers, tomatoes and packaged salads," said Richards, the Morrison Chair at the Morrison School of Agribusiness within the W. P. Carey School of Business. "We can expect to see the biggest percentage jumps in prices for avocados and lettuce -- 28 percent and 34 percent, respectively. People are the least price-sensitive when it comes to those items and they're more willing to pay what it takes to get them."

Richards believes between 10 percent and 20 percent of the supply of certain crops could be lost, and California is the biggest national supplier of several of those crops. For avocados, the state is the only major domestic source.

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

He estimates the following possible price increases due to the drought:

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

Berries likely to rise 21 to 43 cents to as much as $3.46 per clamshell container.

Broccoli likely to go up 20 to 40 cents to a possible $2.18 per pound.

Grapes likely to rise 26 to 50 cents to a possible $2.93 per pound.

Lettuce likely to rise 31 to 62 cents to as much as $2.44 per head.

Packaged salad likely to go up 17 to 34 cents to a possible $3.03 per bag.

Peppers likely to go up 18 to 35 cents to a possible $2.48 per pound.

Tomatoes likely to rise 22 to 45 cents to a possible $2.84 per pound.

"We predict the increased prices will change consumer purchasing behavior," said Sherry Frey, vice president of Nielsen Perishables Group. "While some consumers will pay the increased prices, others will substitute or leave the category completely."

Frey said the increased prices could affect other food categories.

"For a category like avocados, there are non-produce snacking categories, such as chips, crackers and ethnic grocery items, that will be negatively impacted," she said.

"Because prices are going to go up so much, retailers will start looking elsewhere for produce," Richards said. "This means we'll see a lot more imports from places like Chile and Mexico, which may be an issue for certain grocery customers who want domestic fruit and vegetables."
 

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