CNBC's Greg Iacurci is reporting on the rising price of frozen vegetables.
The article discusses how frozen vegetable prices in the U.S. have experienced a significant increase of 18% in the past year, making it the largest increase among all grocery items according to the consumer price index for June 2023. Several factors contribute to this price surge. Unusual weather in California, the biggest supplier of fresh fruits and vegetables in the U.S., has led to flooding and damaged farmland, resulting in decreased vegetable supply.
California is a major producer of various crops, including broccoli, cabbage, carrots, and tomatoes, and accounts for nearly half of U.S. vegetable production. The heavy rain and flooding caused by record precipitation have destroyed crops, delayed planting schedules, and disrupted farm work, further impacting supply.
The war in Ukraine also plays a role in the price spike as it limits the supply of commodities like wheat, corn, and soy, raising prices for these products. Farmers are incentivized to plant these commodity crops rather than vegetables, leading to a decrease in vegetable supply and increased costs for specialty crops like frozen vegetables.
Other contributing factors include high costs for cold storage, fertilizer, and labor. The pandemic has added pressure to grocery prices due to supply-chain issues and fuel costs. Labor costs for farmers have risen significantly, with 70% of crop farm workers in the U.S. being foreign-born, many from Mexico. Reduced Mexican migration to the U.S. has put upward pressure on labor costs, as labor-intensive specialty crops like fruits and vegetables often require hand-picking.
Climate change also poses a long-term threat to crop prices, as extreme weather events, droughts, and invasive pests can destabilize agriculture ecosystems and impact crop yields. Overall, the article highlights the complex web of factors influencing frozen vegetable prices in the U.S., including weather events, geopolitical issues, labor challenges, and the effects of the pandemic and climate change.
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Our focus by highlighting this article is on identifying climate change as a key contributor to the increase in food prices. Climate change acts as a significant risk amplifier across various sectors. The occurrence of extreme weather events, resulting from climate change, adversely affects crop yields, directly impacting consumers' finances. Therefore, it is imperative to address climate change to mitigate the risk of poor harvests and alleviate its impact on our wallets.
Source: CNBC
(This article was written with assitance by ChatGPT)
https://www.cnbc.com/2023/07/20/why-frozen-vegetable-prices-are-up-according-to-economists.html
