California drought likely to cause produce prices to rise

California, the country's largest producer of dozens of items found in grocery stores — including grapes, kiwis, olives, avocados, broccoli, tomatoes, spinach, tree nuts and dairy — is mired in its fourth year of a crippling drought. The scarcity of water has already forced growers in the nation's most populous state to abandon thousands of acres or pay more to water the land they keep in production.

 

While favorable yields, lower fuel prices and a surge in imports tied to the strong U.S. dollar have helped to temporarily offset increased food costs, local retailers and food distributors across the country have responded by increasing their dependence on local producers when they can. Many are poised to pass on their higher costs for produce to consumers by hiking prices.

 

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