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California droughts just one factor in high prices

Staff writer |
The severity and duration of the drought in California has raised concerns over its role in rising food prices at the grocery store, especially for fresh fruits and vegetables.

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Droughts in California are generally associated with higher retail prices for produce, but price increases are lagged due to the time it takes for weather conditions and planting decisions to alter crop production, which then influence retail prices.

In 2005, following five years of drought, retail fruit prices rose 3.7 percent and retail vegetable prices increased 4 percent. Prices continued to rise in 2006, one year after drought conditions began to improve. However, other factors such as energy prices and consumer demand also affect retail produce prices.

As of October 2014, ERS analysts are forecasting fresh fruit prices to increase 4.5 to 5.5 percent in 2014 and vegetable prices to be 2 to 3 percent higher.

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