Tags: California | drought | fruit | vegetable

California Drought Could Trigger Food Inflation

By    |   Wednesday, 22 Jan 2014 06:49 AM

A lack of rainfall in California could have a nationwide impact on food prices. According to the California Department of Food and Agriculture, the state produces almost half of U.S.-grown fruits, nuts and vegetables.

California produces about one-eighth of the nation's total farming output. The state accounts for more than 90 percent of the U.S. production of artichokes, broccoli, celery, almonds, grapes, walnuts and other crops.

A drought could lead to the loss of crops. The state's water managers say unless there are strong storms in the next few months, they may only be able to provide 5 percent of the water needed for the nearly 1 million acres of irrigated farmland.

Fruits and vegetables account for about 1.2 percent of a typical household's spending, according to the Bureau of Labor Statistics. California's drought could also impact the prices of dairy products (which account for 0.8 percent of household spending) and meat (1.8 percent of spending). A 10 percent increase in food costs could add 0.4 percent to the annual rate of inflation.

Meanwhile, a recession seems to be increasingly likely this year.

National Bureau of Economic Research data show that the average economic expansion since World War II has lasted 58 months. The current expansion began 55 months ago in June 2009 and could end this year as consumer spending slows.

© 2017 Newsmax Finance. All rights reserved.

 
1Like our page
2Share
MichaelCarr
A lack of rainfall in California could have a nationwide impact on food prices. According to the California Department of Food and Agriculture, the state produces almost half of U.S.-grown fruits, nuts and vegetables.
California,drought,fruit,vegetable
222
2014-49-22
Wednesday, 22 Jan 2014 06:49 AM
Newsmax Inc.
 

Newsmax, Moneynews, Newsmax Health, and Independent. American. are registered trademarks of Newsmax Media, Inc. Newsmax TV, and Newsmax World are trademarks of Newsmax Media, Inc.

NEWSMAX.COM
MONEYNEWS.COM
© Newsmax Media, Inc.
All Rights Reserved