Lettuce prices suffered their steepest single-month decline on record in July, as a multistate cyclospora outbreak sent shoppers reaching for anything but the leafy green.
Bureau of Labor Statistics data released Wednesday showed lettuce prices tumbled 16.4% from June, the largest one-month drop on record on a seasonally adjusted basis.
Lettuce also posted the sharpest month-over-month deflation within the consumer price index’s food category, even as overall food prices ticked up 0.1% during the same period.
Jeremy Horpedahl, an associate economics professor at the University of Central Arkansas, said the cause was fairly clear, noting “It’s very likely due to the cyclospora outbreak and consumers just not wanting to buy lettuce right now.”
Horpedahl added that the “consumer is just wanting to stay away from this product,” underlining how deeply the outbreak has rattled public confidence in the vegetable.
Despite July’s sharp pullback, lettuce prices remain roughly 7.5% higher than a year ago, more than double the pace of overall price growth tracked across the broader CPI basket.
The Food and Drug Administration identified iceberg lettuce processed at a Taylor Farms facility in central Mexico as the likely source of the waterborne parasite’s spread, and Taylor Farms voluntarily recalled products from that location.
Restaurant chains with lettuce-heavy menus have reported notable traffic declines, even in cases where their own supplies were confirmed free of contamination.
Cava (CAVA) CEO Brett Schulman told CNBC on Wednesday that there were “broader consumer concerns” around leafy greens and fresh produce that affected near-term sales around the end of its second quarter, though he said sales trends have begun to rebound.
Chipotle (CMG) said cyclospora created a sales impact of around 2 percentage points in the back half of July, with executives reassuring analysts that its lettuce supply was unaffected and that the chain had a “very robust” program for food safety.
Yum Brands CEO Chris Turner said the outbreak resulted in a “meaningful near-term sales impact” but added that sales had been “steadily improving” since the FDA first connected the parasite to lettuce served at Taco Bell.
Dollar sales of prepackaged salads plunged 14% during the four weeks ended July 25 compared with the year-ago period, according to NielsenIQ data, illustrating the broad commercial damage caused by the health scare.
Horpedahl compared the current boom-and-bust cycle in lettuce prices to the volatility seen in egg prices in recent years, where bird flu initially drove costs sharply higher before a significant pullback followed.
While cheaper lettuce might ordinarily be welcome news for inflation-weary consumers, Horpedahl cautioned that shoppers are unlikely to take full advantage of the lower prices given persistent food safety concerns surrounding the outbreak, which has sickened thousands.
“Consumers are not going to rush out and buy this now just because it’s cheaper,” Horpedahl said. “It’s fallen because nobody wants it.”
