Economist: If You Can Raise Prices, You’re Doing It; Not Everybody Can Do That

Clint Thompson Alabama, Florida, Fruit, Georgia, Top Posts, Vegetables

By Clint Thompson

The recent increase of input and supply expenses has led to businesses increasing consumer prices. While most can simply increase their consumer prices to recoup those expenses, fruit and vegetable crop producers are not always as fortunate.

Jeff Dorfman, University of Georgia Professor in the Department of Agricultural and Applied Economics and State Fiscal Economist for Georgia, pointed out that grim scenario during a recent Georgia Fruit and Vegetable Growers Association webinar.

“Most of them are raising prices as much as they are able to. In terms of big corporations, Procter & Gamble has signaled they’re planning on raising the prices of all of their prices this fall. FedEx announced (recently) they’re raising prices through price increases and surcharges and fees. We’ve seen what’s happened with used car prices. We can’t get chips to build new cars, and used car prices went through the roof,” Dorfman said.

“Restaurants are raising menu prices because their labor is going through the roof, and their ingredient cost is going up as well. If you can raise prices these days as a business owner, you’re doing it. Not everybody can do that. Everybody who can is sure trying.”

Easier Said Than Done

That’s easier said than done if you are a vegetable or specialty crop producer. Adam Lytch with L&M Family Farms, said prices are already locked in with some buyers while negotiations are being had with other potential customers.

“Fruits and vegetables have been flat or even down over the last 18 months if you will. It’s really tough to battle that, where prices have been, to try to make the argument and educate customers that we need to be more,” Lytch said. “I think it’s a really precarious spot to be in and that we’re having to work through. Some people have been very understanding; others not.

“Looking at the way our costs are increasing, I’m just worried about getting steamrolled in this whole thing. Can we get the price up high enough to overcome this quickly? I think that’s a legitimate concern that we have.”