Wednesday, October 21, 2009

Cost of Living

Food Prices Trending Down From Last Year

Washington--Retail food prices at the supermarket decreased slightly for the fourth consecutive quarter and are significantly lower than one year ago, according to the latest American Farm Bureau Federation Marketbasket Survey. The informal survey shows the total cost of 16 food items that can be used to prepare a meal was $46.03, down $.26 from the second quarter of 2009 and $4.18 lower or 10 percent less compared to one year ago.

Of the 16 items surveyed, nine decreased and seven increased in average price compared to the prior quarter.

Shredded cheddar cheese, ground chuck, whole milk, vegetable oil and Russet potatoes declined the most in price from quarter-to-quarter. Shredded cheddar cheese dropped 23 cents to $4.08 per pound, ground chuck dropped 17 cents to $2.65 per pound, whole milk dropped 14 cents to $2.87 per gallon, vegetable oil dropped 13 cents to $2.72 for a 32-oz. bottle and Russet potatoes dropped 11 cents to $2.65 for a 5-pound bag.

Other items that decreased in price were: sliced deli ham, down 5 cents to $4.75 per pound; boneless chicken breasts, down 2 cents to $3.08 per pound; white bread, down 1 cent to $1.76 for a 20-oz. loaf; and sirloin tip roast, down 1 cent to $3.87 per pound.

“Consumers continue to benefit from modest, steady declines in retail food prices at the grocery store. From a nutritional perspective, it’s important to note that our volunteer shoppers found significantly lower retail prices for several protein-rich foods that are staples in the diet of most Americans, including milk, cheese, eggs and ground beef, compared to one year ago,” said AFBF Economist Jim Sartwelle.

Whole milk decreased 27 percent, cheddar cheese decreased 23 percent, potatoes decreased 22 percent, apples decreased 19 percent, eggs decreased 16 percent, vegetable oil decreased 16 percent and ground chuck dropped 10 percent in retail price compared to a year ago, according to AFBF’s survey.

“Again this quarter and compared to one year ago, the foods that declined the most in average retail price are among the least-processed items in our marketbasket,” Sartwelle said.
Several items went up slightly in price compared to the prior quarter: bacon, up 18 cents to $3.37 per pound; orange juice, up 11 cents to $3.13 for a half-gallon; eggs, up 10 cents to $1.44 per dozen; toasted oat cereal, up 9 cents to $2.95 for a 9-oz. box; flour, up 6 cents to $2.48 for a 5-pound bag; apples, up 5 cents to $1.46 per pound; and bagged salad, up 2 cents to $2.77 for a 1-pound bag. Compared to one year ago, bagged salad increased the most in price among the items in the basket, up 16 percent.

AFBF’s third quarter marketbasket survey tracks closely with the federal government’s August 2009 Consumer Price Index ( report for dairy and related products, which showed a slight decline (-.4 percent) for the ninth consecutive month.
As retail grocery prices have increased gradually over time, the share of the average food dollar that America’s farm and ranch families receive has dropped.

“Starting in the mid-1970s, farmers received about one-third of consumer retail food expenditures for food eaten at home and away from home, on average. That figure has decreased steadily over time and is now just 19 percent, according to Agriculture Department statistics,” Sartwelle said.

Using the “food at home and away from home” percentage across-the-board, the farmer’s share of this quarter’s $46.03 marketbasket would be $8.75.

Further, according to USDA, the average price farmers received for their products in September remained flat from the August level, but was 18 percent lower compared to a year ago.
AFBF, the nation’s largest general farm organization, has been conducting the informal quarterly marketbasket survey of retail food price trends since 1989. The mix of foods in the marketbasket was updated during the first quarter of 2008.

According to USDA, Americans spend just under 10 percent of their disposable annual income on food, the lowest average of any country in the world. A total of 66 shoppers in 29 states participated in the latest survey, conducted in August.

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