Thursday, April 09, 2015

Despite the drought, produce prices are staying stable -- why?

California's drought has driven the prices of some fruits and vegetables up substantially, but others are actually cheaper than they were a year ago. In fact, the U.S. Agriculture Department’s forecast for produce prices predicts modest increases of 2% to 3%. Why aren’t fruit and vegetable prices skyrocketing in these dry times? There are several reasons, farm experts say. For one, many produce products are grown in coastal areas that have not been as affected by the drought as the Central Valley has been. Also, they say, it’s partly because the actual cost of growing the produce makes up only about 10% of the retail price -- the rest covers transportation, handling, packaging and mark-up. And almost paradoxically, except for the lack of rain, growing conditions have been nearly ideal. Clear skies and mild temperatures have meant that farmers who have water are harvesting abundant crops much earlier than they normally would have, said Dave Kranz, spokesman for the California Farm Bureau Federation, a nonprofit organization representing farmers and ranchers...more

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