Bloomberg News

Withered California Fruit Seen Raising Food Costs

April 09, 2014

California Drought Seen Raising Food Costs More Than in 2012

A boat mooring at the bottom of a dried Folsom Lake in California on Feb. 2, 2014. Photographer: Ken James/Bloomberg

The drought that is withering vegetable and fruit crops in California may push up food prices more than the dry spell that ravaged the Corn Belt in 2012, U.S. Agriculture Secretary Tom Vilsack said.

That’s because the current crisis has brought planting in California to a near-halt, while corn and soybean crops were still being produced during the 2012 drought, he said.

“It’s simply because folks aren’t planting,” Vilsack told reporters today after a discussion at the Council on Foreign Relations in New York. That may force the U.S. to rely on more-expensive imports of perishable goods, he said.

California endured its driest year on record in 2013. The most-populous U.S. state has only about a quarter of the average amount of water in mountain snow that melts in the spring to fill lakes and rivers. Governor Jerry Brown has called for a voluntary 20 percent cut in water use and many areas have declared mandatory restrictions.

The U.S. Department of Agriculture last month forecast dairy prices rising as much as 3.5 percent this year, up from 0.1 percent last year, while fruits and vegetables would increase as much as 3.5 percent, one percentage point more than in 2013. California is the leading producer in both categories.

Consumer food prices in the first two months of this year have already risen 0.7 percent, compared with overall inflation of 0.2 percent.

The 2012 drought, the worst since at least the 1950s, pushed corn yields to their lowest since 1995 and drove the price of the grain as well as soybeans to records. Food prices rose 1.8 percent that year, as cost controls from retailers helped keep price gains in check. Last year’s food inflation was 1.1 percent.

To contact the reporter on this story: Alan Bjerga in Washington at abjerga@bloomberg.net

To contact the editors responsible for this story: Jon Morgan at jmorgan97@bloomberg.net Steve Geimann


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