Farm Bureau: Food prices moderate slightly in fourth quarter
WASHINGTON, D.C. -- Retail food prices at the supermarket declined slightly during the fourth quarter of 2011, 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 one or more meals was $49.23, down $3.89 or about 7 percent compared to the third quarter of 2011. Of the 16 items surveyed, 14 decreased and two increased in average price compared to the prior quarter. The overall basket of foods was up about 5 percent compared to one year ago.
"Since about the last quarter of 2010, we have seen consistently higher prices quarter-to-quarter on a broad range of marketbasket items," said AFBF Senior Economist John Anderson in a news release. "With this survey, that trend appears to have reversed. While the marketbasket price was still higher year-over-year, the pull-back from recent highs on most of the items in the basket suggests that food price inflation is slowing down substantially."
Meat and dairy products accounted for about half of the quarter-to-quarter retail price decrease. Sliced deli ham decreased 74 cents to $4.69 per pound, shredded cheddar decreased 38 cents to $4.32 per pound, bacon decreased 36 cents to $4.05 per pound, sirloin tip roast dropped 13 cents to $4.15 per pound, ground chuck dropped 10 cents to $3.17 per pound, boneless chicken breasts decreased 9 cents to $3.24 per pound and eggs dropped 6 cents to $1.72 for one dozen.
Other items that decreased in price compared to the third quarter were Russet potatoes, down 68 cents to $2.75 for a 5-pound bag; Red Delicious apples, down 43 cents to $1.40 per pound; flour, down 34 cents to $2.38 for a 5-pound bag; vegetable oil, down 25 cents to $2.96 for a 32-ounce bottle; bagged salad, down 25 cents to $2.48 for a 1-pound bag; orange juice, down 11 cents to $3.17 for a half-gallon; and toasted oat cereal, down 10 cents to $3.07 for a 9-ounce box.
Items that increased in price compared to the third quarter were: whole milk, up 10 cents to $3.76 per gallon; and bread, up 4 cents to $1.92 for a 20-ounce loaf.
"With consumer confidence still a little shaky closing out the year, it appears that retailers are holding the line on food prices as much as possible," Anderson explained. "Stabilizing energy prices this past quarter also may have helped take some of the pressure off of processor and retailer margins."
Several items showing a decrease in retail price from quarter-to-quarter also showed year-to-year decreases. Compared to one year ago, bagged salad decreased 8 percent; bacon decreased 6 percent, and sliced deli ham and apples each declined 3 percent.
The year-to-year direction of the Marketbasket Survey tracks with the federal government's Consumer Price Index (http://www.bls.gov/cpi/) report for food at home. 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.
"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. Since then, that figure has decreased steadily and is now about 16 percent, according to the Agriculture Department's revised Food Dollar Series," Anderson said. USDA's new Food Dollar Series may be found online at http://www.ers.usda.gov/Data/FoodDollar/app/.
Using the "food at home and away from home" percentage across-the-board, the farmer's share of this quarter's $49.23 marketbasket would be $7.88.
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 53 shoppers in 18 states participated in the latest survey, conducted at the end of October/early November.