Slight Increase in Retail Food Prices

US - Retail food prices at the supermarket increased slightly during the first quarter of 2012 with protein staples – meats and cheese – showing the greatest increase in price, according to the latest American Farm Bureau Federation Marketbasket Survey.
calendar icon 13 April 2012
clock icon 3 minute read

The informal survey shows the total cost of 16 food items that can be used to prepare one or more meals was $52.47, up $3.24 or about 7 per cent compared to the fourth quarter of 2011. Of the 16 items surveyed, 13 increased and three decreased in average price compared to the prior quarter. The cost for the overall basket of foods increased about 7 per cent compared to one year ago.

About two-thirds of the quarter-to-quarter increase in the marketbasket of foods was due to higher retail prices for sliced deli ham, sirloin tip roast, ground chuck, bacon and cheddar cheese.

“Retail prices for meats and cheese were higher in the first quarter of the year due to generally strong demand and tight supplies, a situation that carried over from 2011,” said John Anderson, an AFBF senior economist. “According to Agriculture Department data, retail meat prices probably peaked sometime in the first quarter, and wholesale prices have declined noticeably in recent weeks. This suggests that retail meat prices may decline as 2012 progresses.”

Reversing a decline in the prior quarter, sliced deli ham increased 74 cents to $5.43 per pound; sirloin tip roast increased 60 cents to $4.75 per pound; ground chuck increased 36 cents to $3.53 per pound; shredded cheddar increased 33 cents to $4.65 per pound and bacon increased 16 cents to $4.21 per pound.

Whole milk decreased 23 cents to $3.53 per gallon; white bread decreased 7 cents to $1.85 for a 20-ounce loaf and boneless chicken breasts decreased 5 cents to $3.19 per pound.

Several items showing an increase in retail price from quarter-to-quarter also showed year-to-year increases. Compared to one year ago sirloin tip roast increased 20 per cent, ground chuck increased 14 per cent and sliced deli ham increased 11 per cent.

The year-to-year direction of the Marketbasket Survey tracks with the federal government’s Consumer Price Index 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.

“Through 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 per cent, according to the Agriculture Department’s revised Food Dollar Series,” Anderson said. USDA’s new Food Dollar Series may be found online by clicking here.

Using the “food at home and away from home” per centage across-the-board, the farmer’s share of this quarter’s $52.47 marketbasket would be $8.40.

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 per cent of their disposable annual income on food, the lowest average of any country in the world. A total of 64 shoppers in 24 states participated in the latest survey, conducted in March.

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