Extreme Weather Is Fueling Produce Prices and US Food Price Inflation

Extreme weather conditions are driving the country’s high produce prices, which in turn have been one of the major contributors to overall US food price inflation. And shipping point prices for some perishable produce items may continue to diverge from the US’ Consumer Price Index (CPI) for food. 

Shipping point prices for some perishable produce items rose by as much as 375% in November as abnormal weather conditions this autumn wreaked havoc on supplies, particularly in California. The US' CPI for food rose a modest 0.7% from September to October, the US government’s latest reported number. 

While it is typical for US produce prices to increase in the last quarter of the year as winter begins, some recent price jumps have been record breaking. Crops grown in California’s Salinas Valley, often called “the Salad Bowl of America”, down through Ventura County, a primary growing region for berries, lurched from an extended heat wave that triggered pest and disease outbreaks in September straight into abnormally cold weather, as seen in this display of growing conditions from Gro’s Climate Risk Navigator for Agriculture. Combined, these conditions stressed plants, leading to reduced yields and steep price spikes in produce staples, including romaine lettuce and strawberries. 

This November strawberry volumes out of California were 66% lower than a year earlier, and volumes will continue to remain low into January following an atmospheric river event that hammered California’s prime growing areas over the December 10th weekend. 

As these heavy rains will likely lead to quality-related issues for mature strawberries and a reduction in flowering in less developed plants, strawberry pricing will also likely remain higher than usual into the New Year. New crop harvestings will begin in February. Currently, prices are $20 per flat (per 8 quarts of berries), just $2 above the 10-year average, but below their late November high of $32 per flat. 

Lettuce growers are facing similar extreme weather challenges. To make up for the production losses resulting from September’s blistering heat wave and October’s frigid temperatures in the Salinas Valley, some growers in Yuma, Arizona, started harvesting their crops earlier than usual. 

Leafy greens are at a higher risk of price increases and supply disruptions as lettuce growers shift production from Salinas to Yuma where winters are warmer. This usually leads to a rapid decline in lettuce prices in November as production ramps up in Yuma. This year, however, romaine prices — which for the past 10 years have averaged $12.69 per case in mid-November — hit a record $91.45 per case. 

Romaine prices have been falling since, reaching $34.50 per case on December 22. But this downward price trend might slow as Yuma was hit with several days of severe frosts last week. In addition to delaying harvests, frosts can stunt the growth of younger plants and lead to other quality issues that could limit romaine’s recent price recovery, keeping prices elevated.