Consumer Staples

Your food, your wallet and the California drought

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American consumers are already feeling the pinch of rising food prices, and they will likely experience more—courtesy of California's devastating drought.

"I would expect a 28 percent increase for avocados and 34 percent for lettuce," said Timothy Richards, a professor of agribusiness at Arizona State University who conducted research released this week on probable crop price increases stemming from the ongoing drought.

In a phone call with, Richards added that the price increases would also include foods including berries, broccoli, grapes, melons, tomatoes, peppers and packaged salads. The higher rises should be felt in the next two to three months, he said.

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To come up with his figures, Richards used retail-sales data from the Nielsen Perishables Group, an industry analytics and consulting firm, to estimate how much the prices might vary for the fruit and vegetable crops most likely to be affected by the drought.

Those most vulnerable are crops that use the most water or those sensitive to reductions in irrigation, according to Richards.

Industry estimates range from a half-million to 1 million acres of agricultural land in California likely to be affected by the current drought, said Richards. The state's governor, Jerry Brown, declared a state of emergency in January due to the lack of water.

The Golden State grows more than 200 different crops, some grown nowhere else in the U.S. California produces almost all of the country's almonds, apricots, dates, figs, kiwi fruit, nectarines, olives, pistachios, prunes, and walnuts. It leads in the production of avocados, grapes, lemons, melons, peaches, plums, and strawberries. Only Florida produces more oranges.

Richards said he believes between 10 and 20 percent of the supply of certain crops from the state could be lost.

Richards estimates the following price increases:

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

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

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

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

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

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

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

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

Even snacks affected

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Richards said that even if the drought ended today, it would take months for his projected price increases to reverse, due to severely low snow pack in the California mountains. When it melts, that runoff helps feed the state's water supply.

He explained that even with the rising prices, consumers will likely be more wiling to pay them for the items he's researched. But Sherry Fey, vice president of Nielsen Perishables Group, is not so sure.

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"We've identified certain consumers who will be more heavily affected by the price increases," she said in an email. "For example, younger consumers of avocados would be affected and likely not buy them."

Fey also said that non-produce snacking categories, such as chips and crackers that are often consumed with foods like avocados, could be negatively affected with lower sales.

Imports a solution or problem?

Richards also said that retailers will start looking elsewhere for produce, and that includes importing more items from countries like Chile and Mexico.

That could be an issue for some consumers who want only domestic fruits and vegetables. Imports could help contain price increases but may create possible health concerns, according to Richards.

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"We have border inspections of course but things that go wrong with crops usually happen at the growing source, " Richards explained. "So there could be some added risk."

Besides the California drought, Richards said a shortage of labor in agriculture is aggravating price increases.

"It's like a perfect storm," he said. "We don't have enough water or enough workers to pick crops. So much food is left in the fields. It's just adding to the woes."