A produce worker stocks a shelf near romaine lettuce (top shelf, right) at a Washington, D.C., supermarket on November 20, 2018.
Andrew Caballero-Reynolds | AFP | Getty Images
Lettuce prices soared in July as Cyclospora outbreaks in several states prompted restaurants to avoid leafy greens.
Vegetable prices have fallen 16.4% since June, the largest single-month drop on record, according to seasonally adjusted data released Wednesday by the U.S. Bureau of Labor Statistics. Lettuce also recorded the sharpest month-on-month decline within the CPI food category in July, with overall prices increasing by 0.1% over the period.
“It’s very likely due to the strongyle outbreak and consumers not wanting to buy lettuce right now,” said Jeremy Hopedahl, an associate professor of economics at the University of Central Arkansas. “Consumers just want to stay away from this product.”
July’s decline has brought lettuce prices down from this summer’s all-time highs. However, lettuce prices were still up about 7.5% in July compared to a year ago, more than double the pace of price growth seen across the CPI basket in the recent past.
The rise in lettuce prices before this month was due to soaring fertilizer prices due to the Iran war and rising labor costs on U.S. farms due to President Donald Trump’s mass deportations.
The recent boom-bust price cycle may remind consumers of egg price fluctuations in recent years, Holpedahl said. Prices initially skyrocketed due to reduced supply due to bird flu, but costs have fallen significantly this year.
The Food and Drug Administration said iceberg lettuce processed at a Taylor Farms facility in central Mexico is likely the epicenter of a recent outbreak of the waterborne parasite. Taylor Farms voluntarily recalled products produced at its location.
Several chains that include lettuce on their menu items reported decreased customer traffic due to consumer concerns about the outbreak, even if they did not have contaminated supplies.
hippopotamus CEO Brett Schulman told CNBC on Wednesday that there was “broad consumer concern” regarding leafy greens and fresh produce, which impacted near-term sales around the end of the second quarter. But Mediterranean executives at the fast-casual chain said sales trends are starting to recover.
A job opening sign is posted on the door of a Taco Bell in Alexandria, Virginia on August 22, 2024.
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In the four weeks ending July 25, dollar sales of prepackaged salads fell 14% from a year earlier, according to NielsenIQ.
Holpedahl said the plunge in lettuce prices would ostensibly be seen as good news for shoppers who have struggled with years of above-desirable inflation. But he said consumers were unlikely to take full advantage of the cost savings given continued concerns over food safety amid an outbreak that has sickened thousands of people.
“Consumers aren’t going to rush out and buy this right now just because it’s cheap,” Hopedahl said. “It fell because no one wanted it.”
— CNBC’s Amelia Lucas contributed reporting.
