Farm Bureau’s (FB) informal survey shows retail prices of 16 “marketbasket” items were down 5.5% from the fourth quarter of 2008.
Retail food prices at the supermarket dropped slightly for the second consecutive quarter, 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 $47.41, down $2.80 from the fourth quarter of 2008.
Of the 16 items surveyed, 11 decreased and five increased in average price compared to the prior quarter. The overall cost of the marketbasket of foods in the first quarter dropped just under 1% compared to a year ago.
Shredded cheddar cheese, milk and vegetable oil showed the largest retail price declines and together account for most of the decrease in average price of the overall market basket. Shredded cheese dropped 70¢ to $4.24/lb.; milk dropped 67¢ to $3.15/gal.; and vegetable oil dropped 38¢ to $2.79 for a 32-oz. bottle.
“Continued weak demand overseas for U.S. dairy products combined with increased on-farm production are behind the softening retail prices for shredded cheese and whole milk,” says Jim Sartwelle, an AFBF economist.
Five items increased slightly in price this quarter: ground chuck and sliced deli ham, up 8¢ to $2.94 and $4.94/lb., respectively; sirloin tip roast and flour, up 5¢ to $3.99/lb. and $2.51 for a 5-lb. bag, respectively; and American salad, up 2¢ to $2.63 for a 1-lb. bag.
New this quarter, Farm Bureau is reporting average retail prices on different foods in the market basket with the addition of sliced deli ham, shredded cheddar cheese, chicken breasts, orange juice and bagged salad. Pork chops, block cheddar cheese, whole chicken fryers, mayonnaise and corn oil were dropped from the survey.
“The balance of foods in the market basket has been adjusted to track more closely with the way Americans currently shop for groceries,” Sartwelle says. “However, it’s important to note that the foods we no longer report prices on as part of the market basket survey remain staples in the American diet.”
“A trend that shows no signs of slowing down is consumers buying more fruits and vegetables, as well as pre-chopped and partially prepared foods. The updated market basket survey takes that into account and is more contemporary.
“Although this survey’s slight decline in retail prices for the quarter is welcome news, through our new nutrition fact sheets, we are pleased to offer consumers information on how to stretch their grocery dollars with healthy, nutritious food,” says Terry Gilbert, a volunteer shopper and Kentucky farmer who chairs the AFB Women’s Leadership Committee.
According to the federal government, the Consumer Price Index (CPI) for all food is projected to increase 3-4% in 2009. 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 USDA statistics,” Sartwelle says.
Using the “food at home and away from home” percentage across-the-board, the farmer’s share of this quarter’s $47.41 market basket would be $9.00.
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 90 shoppers in 32 states participated in the latest survey, conducted in late February and early March.