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January 14, 2015 
Allen Lund Company Newsletter
Written by your perishable experts 

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Drought Pricing
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Nora Trueblood, Editor
4529 Angeles Crest Hwy., Suite 101
La Ca´┐Żada, CA 91020
(800) 475-5863 - Office

Drought Pricing


Does your grocery bill seem to be slightly higher than normal lately?  A small part of that may be a direct result of the weather, or lack thereof in our main agricultural areas. California for example has been going through a drought for the past few years.  This, along with other factors, could have a direct affect on the prices of produce in your grocery store.


"California recorded its fourth driest year on record in terms of statewide runoff," said Jeanine Jones, deputy drought manager with the California Department of Water Resources.  The drought in California has limited the supply of ground water to crops, especially fruits and vegetables.  The cost of ground water and insufficient water supply may eventually lead to the downsizing of acres which would lead to an increase in retail cost.  However, it is not quite known how much downsizing will take place and how soon.


Since produce is highly perishable there is little storage and the price changes can be seen quicker than other affected products.  You will see however, a delayed or muted effect from the time of the drought and increase in retail cost.  For example, some crops can take several months to complete the growing process.  Therefore, the change in retail price may not be seen for several months after the drought actually takes place.  The same is true on the other end as well; retail prices can continue to stay increased for months after the drought has ended.

The hope is to get some steady rain in these agricultural areas, but the current assumption is supermarket prices are still going to raise 2.5 - 3.5% over last year's prices.  So next time you see the national weather don't forget to see what the weather is in California; for you may not be there, but it may affect you.




Eric Follo
Transportation Broker, Boston

Eric Follo has been with the Allen Lund Company for 7 years.  He has been a Transportation Broker for dry, perishable and frozen freight while with the Allen Lund Company.  He is currently working with the Boston produce department concentrating on loads from the West Coast to East Coast.

About Allen Lund Company: Specializing as a national third-party transportation broker with nationwide offices, the Allen Lund Company works with shippers and carriers across the nation to transport dry, refrigerated (specializing in produce), and flatbed freight; additionally, the Allen Lund Company has an international division, which is licensed by the FMC as an OTI-NVOCC #019872NF, and a logistics and software division, ALC Logistics. 
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