Produce Prices Down in California, Report Saysby Tom Burfield July 24, 2017

Fruit and vegetable prices were down nearly 4% in California during the first quarter of 2017, according to the FPFC Market Report compiled by Fusion Marketing for the Anaheim, Calif.- based Fresh Produce & Floral Council.

Average per pound price was $1.69, according to the report, which was released in June.

This was the first time in more than three years that produce prices declined in California, the report said.

"Price deflation and a three-week shift in Easter, which pushed the holiday into the second quarter" were blamed for the price drop.

Specifically in Los Angeles, dollar sales for the 52-week period ending March 26 dropped 1% to $2.8 billion, while volume dropped 3% to 1.3 billion pounds. Average price per pound was up 2% from the prior year to $1.49.

For the same 52 weeks, fruit edged out vegetables, accounting for 50% of dollar sales compared with 47% for vegetables and 3% for "other."

For the first 13 weeks of the year, total produce dollars in Los Angeles were down $9.1 million compared to the first quarter of 2016. Fruit was down $1.7 million and vegetables were down $7.9 million, the report said. Average price per pound for the first quarter was $1.58, down 3% from the same period a year ago.

Dollars spent on organic produce were up $3.7 million from the prior year, while dollars spent on conventional produce were down $13 million.

On the vegetable side, dollar sales for the 52-week period were unchanged from $1.3 billion, while pounds were down 1% to 836 million. Average price per pound of vegetables was up 1% to $1.61.

During the first 13 weeks of 2017, bagged salads, with sales of $6 million, showed the highest growth rate compared to the previous year, the report said.

Looking at some selected vegetable categories:

Broccoli was down 2.7% in pounds but up 12.3% in dollars; Celery was down 6.5% in pounds and 0.3% in dollars;

Cucumbers were up 1.7% in pounds but down 1.9% in dollars; Corn was up 7.5% in pounds, down 5.7% in dollars;

Kale was down 0.8% in pounds but up 8.3% in dollars; Mushrooms were up 4.5% in pounds but dollars were down 2%; Onions were down 2% in pounds, up 0.7% in dollars;

Potatoes were down 2.7% in pounds but up 4.8% in dollars; Tomatoes were down 1% in pounds and down 4.3% in dollars; and Spinach was up 2.4% in pounds and down 0.7% in dollars.

Turning to fruits, dollar sales were down 3% for the 52 weeks ending March 26 with $1.4 billion. Pounds were down 5% with 1 billion pounds sold. Price per pound was up 3% to $1.36.

Top growth categories were avocados, melons, oranges, limes and mangoes. Looking at some selected fruit categories:

Apples were down 12% in pounds but up 8.2% in dollars; Avocados were up 3.2% in pounds and up 4.2% in dollars; Berries gained 10.6% in pounds but were down 5.7% in dollars; Grapes were down 7.6% in pounds and down 4.4% in dollars; Melons dropped 2% in pounds but gained 1.3% in dollars; Oranges were down 6.5% in pounds and down 5.4% in dollars; Peaches dropped 14.2% in pounds but gained 2% in dollars; and Pears were down 21% in pounds and up 8.3% in dollars.

Turning to the organic category, during the first 13 weeks of the year, organic fruit accounted for an 8% dollar share and 4% volume share.

Dollar sales were up 17% from the first quarter of 2016 to $25 million, and pounds were up 20% to 9.3 million.

Price per pound was down 2% from the same period a year ago to $2.69.

Top organic fruit categories were berries, apples, bananas and avocados.

Organic vegetables accounted for 12% of dollar share and 7% of volume share.

Dollars were unchanged at $40.4 million and pounds were up 9% to 14.7 million.

Price per pound was down 8% to $2.74.

Top-selling organic vegetables were lettuce, spinach, carrots and tomatoes.

Article retrieved July 27, 2017 from http://www.thepacker.com/news/produce-prices-down- california-report-says

Conduct an economic analysis of "Produce Prices Down in California, Report Says".

For the economic analysis consider the market for fruits over the 52 week period.

1. (a)Consider the markets for specific fruits; apples, grapes, oranges, peaches, and pears. Use the equation TR = P Q. For each of these markets determine whether the price has increased or decreased and by how much the price has increased or decreased. Report your answer in % to two decimal places.
2. (b)From your calculations in (a), and assuming only one shift in supply or demand, show and explain each scenario in a supply and demand diagram.
3. (c)Using information from (a) and (b), calculate the price elasticity. Are you calculating elasticity of demand or elasticity of supply?
4. (d)Present your results in a table. The table should summarize total revenue changes, price changes, quantity changes, and the calculated price elasticities for apples, grapes, oranges, peaches, and pears. Also include in your table the price elasticity values from Price and Mittelhammer. Be sure to consider the orientation of your table so that the data is easy to read. You will be graded on your table presentation.
5. (e)Write APA reference for the article by Burfield and the article by Price and Mittelhammer.