Lettuceprices cratered in July as the multistatecyclosporaoutbreak pusheddiners to shunthe leafy green.
Prices for the vegetable tumbled 16.4% from June, the largest one-month decline on record, according to seasonally adjusted datareleased Wednesdayby the Bureau of Labor Statistics. Lettuce also posted the sharpest month-over-month deflation within theconsumer price index's food category in July, which saw overall prices tick up 0.1% in the period.
"It's very likely due to the cyclospora outbreak and consumers just not wanting to buy lettuce right now," said Jeremy Horpedahl, an associate economics professor at the University of Central Arkansas. The "consumer is just wanting to stay away from this product."
July's declines pulled lettuce prices off all-time highs posted this summer. But lettuce prices are still up around 7.5% in July compared with a year ago, more than double the pace of price growth seen across the closely followed CPI basket.
Lettuce's runup before this month was driven by the Iran warboosting fertilizer pricesand PresidentDonald Trump'smass deportationsresulting in increased labor costs for U.S. farms.
This recent boom-and-bust price cycle may remind consumers of the cost fluctuations in eggs over recent years, Horpedahl said. While prices initially surged as thebird fludrove down supply, costs have sincefallen drastically this year.
The Food and Drug Administration called out iceberg lettuce processed at aTaylor Farmsfacility in central Mexico as the likely ground zero for the waterborne parasite's recent spread. Taylor Farms voluntarily recalled products coming from that location.
Several chains with lettuce in menu items reported a drop in traffic due to consumer concerns about the outbreak, even if they didn't have contaminated supplies.
CavaCEO Brett Schulmantold CNBC on Wednesdaythat there were "broader consumer concerns" around leafy greens and fresh produce that affected near-term sales around the end of its second quarter. But the Mediterranean fast-casual chain's executive said sales trends have begun to rebound.
Sweetgreensaid last week that it sawreduced demand as a result of the outbreakand that it was not sure when a recovery would take place. The salad chain lowered its full-year outlook, leading investors to sell shares following the report.
Chipotlesaid that cyclospora created asales impact of around 2 percentage pointsin the back half of July. On a call late last month, executives reassured analysts that its lettuce supply wasn't affected and that the burrito chain had a "very robust" program for food safety.
Yum BrandsCEO Chris Turner said in late July that the outbreak — which the Food and Drug Administrationfirst connected tolettuce served at its Taco Bell chain — resulted in a"meaningful near-term sales impact."But Turner said sales had been "steadily improving."
Dollar sales ofprepackaged saladsplunged 14% during the four weeks ended July 25 compared with the year-ago period, according to NielsenIQ.
On the surface, Horpedahl said sharp price declines in lettuce would be viewed as good news for shoppers grappling with years of higher-than-preferred inflation levels. But he said that consumers likely won't be taking advantage of the cost reductions to the fullest extent given continued worries around food safety amid 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."
— CNBC's Amelia Lucas contributed reporting.
