Product recalls and safety failures frequently harm businesses beyond the company responsible for the problem. Here’s an example: the wave of children’s-product recalls in 2007 helped prompt the Consumer Product Safety Improvement Act’s broadly applicable testing and certification requirements, imposing compliance costs across the children’s-products industry. Empirical studies also find that automobile recalls can reduce supplier firm value and sales of nonrecalled models of the same brand, while seafood recalls temporarily reduce purchases of unrecalled brands of the affected species.
These effects are generally described as economic “category spillover” or “product-harm spillover.” For the U.S. economy, fresh produce, however, may represent the most important example of “product-harm” spillover because domestic growers can simultaneously experience an immediate collapse in demand, destruction of perishable crops, reduced near-term planting schedules and continuing food-safety costs, even when an outbreak is traced to an imported product.
The 2022 hepatitis A outbreak associated with strawberries imported from Mexico provides a clear quantifiable example. Although California strawberries were neither implicated nor recalled, in a Western Growers report, we estimate that California growers lost approximately $125 million in wholesale revenue during the five weeks following the U.S. Food and Drug Administration’s (FDA) initial public-health advisory. Prices for conventional and organic strawberries fell nearly 30 percent beyond what could be explained by normal seasonal and supply conditions. The losses were especially impactful because the advisory was issued near the beginning of California’s peak strawberry season and initially did not clearly identify the strawberries as imported.
The current (2026) Cyclospora outbreak profoundly demonstrates the severity of spillover effects for domestic fresh produce. Although a portion of the outbreak was associated with iceberg lettuce from Mexico, California growers supplied most of the lettuce available during that period. Nevertheless, the most recent data released from Numerator estimates a loss of roughly $280 million in consumer spending on fresh produce for every month that concerns regarding Cyclospora continue. The same poll estimates that around 6.5 million households stopped buying salad mixes and kits in July, and per-household spending was down 10.7 percent. California growers reportedly destroyed approximately one-third of harvest-ready lettuce crops, laid off workers and experienced canceled orders during the first active weeks of the outbreak.
Fresh produce is particularly exposed because it is often marketed as an interchangeable commodity. Consumers recognize “lettuce,” “strawberries” or “cantaloupe,” but usually do not know the grower, growing region or country of origin—particularly when eating in restaurants or purchasing processed or mixed products. Although federal country-of-origin labeling applies to covered fresh and frozen fruits and vegetables at qualifying retailers, restaurants and other foodservice establishments are exempt, as are commodities incorporated into processed foods. When a public-health communication identifies a commodity without clearly identifying its origin, supplier, brand and distribution period, a lack of clarity pushes many consumers to avoid the entire category.
Unlike automobiles, toys or other durable products, fresh produce cannot be held until consumer confidence returns. Crops are planted months in advance, harvested within narrow windows and rapidly lose their value. When demand disappears, growers must accept sharply lower prices, leave crops unharvested or destroy market-ready food. Thus, consequences extend to farm workers, processors, cooling facilities, distributors, shippers and rural agricultural communities. Even a relatively short advisory can eliminate an entire season’s profit.
Negative economic spillover impacts also include domestic growers bearing food safety expenses, such as enhanced audits, testing, training, equipment improvements and other compliance costs that may not be imposed consistently (or at all) on foreign growers (even in the foreign region and with the commodity that was associated with an outbreak or recall). If the responsible foreign farm and importer (region or country, when applicable) do not face equivalent investigation, corrective-action and verification requirements, domestic growers suffer a double economic penalty: they absorb the market losses caused by the imported failure while continuing to finance a more demanding prevention system.
If these spillover effects are not addressed, consumer consequences will extend beyond temporary shortages. Repeated, broadly communicated outbreaks can erode trust in entire produce categories and encourage consumers to purchase fewer fresh fruits and vegetables. This is particularly concerning because federal nutrition policy continues to include objectives to increase fruit and vegetable consumption, while research associates inadequate consumption with greater risk of chronic disease.
As a result of continued consequences of negative economic spillover, consumers also face reduced choice, less reliable domestic availability and higher long-term prices. Growers confronting repeated losses may plant fewer acres, avoid open-market production or be forced to shut their doors. Reduced domestic capacity would further increase reliance on imported produce, compounding the situation. USDA estimates that imports already supplied approximately 59 percent of U.S. fresh-fruit availability and 35 percent of fresh-vegetable availability in 2023, compared with 50 percent and 20 percent, respectively, in 2007.
This creates the potential for a self-reinforcing cycle: imported-product failures damage domestic producers; domestic production contracts; import dependence increases; and future failures from foreign operations expose an even larger share of the domestic food supply.
Reducing the impact of economic spillover on domestically grown fresh produce does not mean withholding information from consumers but does require providing better information more quickly. Public health communications should identify country of origin, growing region, supplier, brand, distribution channel and affected dates as soon as the evidence permits—and promptly correct any earlier speculation. Traceability and regulatory accountability must extend through importers to foreign farms and packing operations as required by law. Without these improvements, blameless U.S. growers will continue to bear the economic consequences of imported-produce failures, while consumers ultimately bear the larger costs through improperly managed food safety regulatory oversight, declining confidence, reduced consumption, diminished domestic production and greater dependence on imported food.
