Inflation rates for food have declined this year after a tough year in 2022, but American shoppers are still seeing some noticeable price increases, with prices for frozen beverages like orange juice rising by double digits amid harsh weather and diseases affecting citrus crops.
Key Facts
The prices of juices and non-carbonated frozen beverages have increased by 18.6% from November 2022 to the same month this year, according to the latest Consumer Price Index report from the Federal Bureau of Labor Statistics – the largest price increase over 12 months for any food group tracked by the agency.
In November, the average price for a 12-ounce can of frozen orange juice was $3.64, up from $2.67 in November last year, according to data from the Federal Bureau of Labor Statistics.
Prices for frozen juices have increased partly due to the tough years faced by citrus crops in the United States, as farms in Florida – which typically produces most of the country’s orange juice – recovered from hurricanes in 2022.
Orange crops are also suffering from citrus greening disease, which causes the production of “green, misshapen, and bitter” fruit, according to the U.S. Department of Agriculture.
Surprising Fact
Not only are frozen beverages becoming more expensive, but they are also becoming less popular. Analysts at IBISWorld reported earlier this year that fruit juice concentrates – including frozen apple juice, grapefruit juice, cranberry juice, grape juice, and other concentrates – now make up less revenue than they have in the past, despite historically dominating the frozen fruit sector. The report noted that demand for concentrates has decreased partly due to consumer trends toward healthier alternatives to fruit juice and juice cocktails, which often contain added sugars and preservatives.
What We Don’t Know
Whether citrus production in Florida will recover next year and how that will affect frozen fruit juice prices. The U.S. Department of Agriculture expects orange production in the state to recover by 30% this season after it hit a nearly 90-year low in the 2022-2023 season – but production may still remain much lower than 2021-2022 levels. The USDA projects grapefruit production will be 2.40 million boxes, which would mean a 33% increase if achieved.
The Big Number
2.9%. This is how much food prices have increased for consumers since last November, according to the Federal Bureau of Labor Statistics. The increase was much lower than last year when food costs rose by 10.6% in the 12 months ending in November 2022. Prices for food at home have only risen by 1.7% up until last month, compared to 12% last year, although prices for food away from home and restaurants jumped by 5.3% in November.
Main Background
Overall inflation has decreased throughout 2023 after reaching its highest levels since the 1980s last year, as interest rates have been raised by the Federal Reserve to their highest in 22 years in an attempt to ease consumer prices at the cost of slowing economic growth. General inflation rose by 3.1% year-over-year last month, exceeding the Federal Reserve’s 2% target, but down significantly from 7.1% last November. Food prices have seen some of the highest increases following the COVID-19 pandemic, and from 2021 to 2022, inflation and supply chain issues forced American shoppers to face the largest annual increase in food prices – 11% – in four decades, according to the Government Accountability Office. Although food inflation has steadily slowed since then, some areas, such as meats, have seen sporadic increases.
Interview
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“Egg Inflation”. Egg prices have seen the largest decrease from last year to this year, dropping 22.3% since last November. Egg prices rose significantly – reaching $5.36 per dozen in some parts of the country last December – in 2022 and into this year due to avian influenza outbreaks, leading farmers to cull millions of laying hens and increase prices. Egg prices rose 70% from January 2022 to 2023, according to federal government data, although they began to decline in late March.
What to Watch For
“Meat inflation” may still be an issue next year. GroIntelligence, an agricultural data company, estimates that beef, pork, and chicken prices “will significantly impact household budgets and profit margins” in the coming year, forecasting significant increases in beef prices in 2024 due to continued cattle shortages and “more volatility” in chicken prices.
Further Reading
Egg prices rise by 70% in one year amid price inflation accusations by Anthony Telles
Food price increases no longer exceed general inflation by CNN Business
Follow me on Twitter. Send me a secure tip. Molly Bohannon
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