Last week, about 94% of California experienced a severe, extreme or exceptional drought.
The ongoing drought in California is expected to affect the prices of major crops, further fueling food inflation for consumers.
US Drought Monitor — a collaboration between the University of Nebraska-Lincoln, the United States Department of Agriculture (USDA) and the National Oceanic and Atmospheric Administration — reported that about 94% of California fell into the severe, extreme, or exceptional drought categories as of the past week. In early July, almost 97.5% of the Golden State had such a drought.
DROUGH FORCES FARMERS TO REDUCTION AND OTHERS TO DECREASE AS ECONOMISTS WARN OF INCREASING PRICES
According to California Department of Food and Agriculture, California grows more than one-third of the nation’s vegetables and three-quarters of its fruits and nuts. The total production of tomatoes, garlic and onions in the state in 2021 was 224.01 million centners (q), 4.192 million centners and 19.026 million centners, respectively. per USD statistics.
Dry conditions and high temperatures in California are “making it difficult for producers to meet market demand,” the USDA said in a statement. report at the end of August about the state’s tomato production. In the report, the ministry cut forecasts for this year’s California tomato production, which is used to make tomato-based products like ketchup and pasta sauce, by 2% from last year.
Kraft Heinz, which makes ketchup, Classico pasta sauces and other food products, told FOX Business: “This season’s tomato crop in California has led to lower yields overall.”
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“However, we do not anticipate a service interruption for any Kraft Heinz products where tomato is a critical ingredient,” the company said in a statement. “To support production, our cross-functional team implemented a strategy that identified alternative regions for producing tomatoes, as well as an approach to breeding unique tomato seeds that are more climate tolerant and use water efficiently.”
FOOD PRICES COULD RISE AS EXTREME WEATHER CONDITIONS HIT FARMERS
In addition to tomatoes, other crops such as garlic and onions are also expected to be affected.
“What you’re seeing this summer doesn’t even hit the grocery shelves is a 25 percent increase in the cost of the product for processors – canners and customers,” said the president of the California Food and Agriculture Board. This was reported to Reuters by Don Cameron. “Onions and garlic have already been agreed for 2023 with another 25% price increase.”
For the first time, Reuters reported on the California drought and its impact on crops such as tomatoes, onions and garlic.
The expected rise in prices for major crops could increase consumer inflation, which has already reached a 40-year high.
AUGUST INFLATION BREAKDOWN: WHERE PRICES HIT AMERICANS HARDEST?
In August Consumer price index (CPI) rose 8.3% year-on-year and 0.1% year-on-year, the US Department of Labor said in mid-September. Grocery prices rose 11.4% year-on-year and 0.8% each month, with the cost of groceries rising 13.5% year-over-year, according to the Labor Department.
Fruit and vegetable prices also rose, up 9.4% from the previous year and 0.5% from July. While tomato prices were down 0.2% from a year ago, they rose 2.3% from July to August, the Labor Department said. The cost of lettuce rose 10.7% year on year and 0.8% month on month.
The Bureau of Labor Statistics plans to release new CPI data on Thursday.
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