Locked-down Americans have dramatically changed their eating habits, disrupting supply chains that provide food to restaurants and supermarkets. But figuring out how the pandemic has affected the price of our meals is much more complicated than simply checking the cost of groceries, especially when it comes to fresh produce.
We used data on the Gro Intelligence platform to quantify historical price volatility for hundreds of fruits and vegetables. What we learned is that fresh produce is one of the most volatile markets in the world, even when the US isn’t facing a coronavirus pandemic. By calculating how much prices fluctuate in “normal” times, we can arrive at a volatility adjusted price change—an estimate of how much of the price change is actually caused by COVID-19.
Fresh produce markets face unique issues such as seasonality and perishability, and prices can shift significantly between a single crop’s multiple cultivars, growing practices, sizes, and relative freshness. In addition, some package sizes and varieties favor restaurants and foodservice, where demand has dropped, and others favor use in supermarkets or other channels that wind up in consumers’ homes.
To help bring the intricacies of these price moves to life, we created two hypothetical meals, relying heavily on fresh produce along with a protein. Both meals include the same fruits and vegetables but use slightly different cultivars and package sizes for each ingredient. As a result, the prices of the meals compared with a year earlier changed in substantially different ways from each other, both in their actual prices and the volatility adjusted prices.
The table below shows the wide range of year-over-year price changes for a variety of fruits and vegetables, and how those changes were affected when adjusted for each product’s historical price volatility. As can be seen from the table, Meal A cost 66% more to make than it did a year ago, while Meal B cost 19% less.
While COVID-19 continues to affect food supply chains across the United States and the rest of the globe, it is clear that there is more nuance to the price story, especially for fruits and vegetables, than appears at first glance. Gro’s platform can help users understand the complexity of this market through holistic monitoring services, while simultaneously allowing for unprecedented insight into market trends.
This insight was powered by the Gro platform, which enables better and faster decisions about factors affecting the entire global agricultural ecosystem. Gro organizes over 40,000 datasets from sources around the world into a unified ontology, which allows users to derive valuable insights such as this one. You can explore the data available on Gro with a free account, or please get in touch if you would like to learn more about a specific crop, region, or business issue.