Retail food prices at the supermarket declined slightly during the second quarter of 2012 with protein staples – meats, cheese, milk and eggs – showing the greatest drops in price, 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 $50.91, down $1.56 or about 3 percent compared to the first quarter of 2012. Of the 16 items surveyed, 12 decreased and four increased in average price compared to the prior quarter. The cost for the overall basket of foods fell about one-half of 1 percent compared to one year ago. Most of the quarter-to-quarter decrease in the marketbasket of foods was due to lower retail prices for sliced meats and dairy products.
“The decline in retail meat prices for the second quarter is not unexpected,” said John Anderson, an AFBF senior economist. “Wholesale meat prices trended lower at the end of the first quarter of the year and consumers are benefiting from that as retail prices have followed suit.”
Janet Krob, who serves as one of Montana Farm Bureau’s Marketbasket Survey shoppers, said it’s good to see some prices dropping, even slightly. “Food is still very affordable in this country,” Krob says. “I know currently there are many farmers and ranchers in Montana, Wyoming, Colorado and across the Midwest who have real concerns about their crops and grazing this year due to fires and the drought. However, they’re doing what they can and it’s important to appreciate their determination to keep producing safe, healthy products even in tough conditions. They can’t control the weather doing damage to land if it’s flooding or on fire. At least we’re seeing some food prices decreasing, at least for the time being.”
Reversing increases in the prior quarter some food prices were down; for instance, shredded cheddar decreased 36 cents; sliced deli ham and orange juice decreased 19 cents; bacon decreased 17 cents; large eggs declined 16 cents; sirloin tip roast decreased 6 cents and flour decreased 3 cents.
Krob points out Montanans are still paying more than the national average for products such as shredded cheddar, deli ham and orange juice, but ground chuck, whole milk and russet potatoes are considerably less than the national average.
“Because fuel is still expensive and much of our food is transported in, the cost of bringing food to our area certainly adds to what the consumer pays,” notes Krob. She cites recent news stories that indicate the drought will cause food prices to rise across the country.
Four items showed modest retail price increases: ground chuck increased 12 cents; Russet potatoes increased 5 cents; white bread increased 3 cents; and vegetable oil increased 1 cent.
Several items showing a decrease in retail price from quarter-to-quarter also showed year-to-year decreases. Dairy products were generally down year-to-year, reflecting the effects of increased dairy production this year. Bacon prices are also down from last summer’s record levels.
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. Food for June was up only 0.2 percent. 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 percent, according to the Agriculture Department’s revised Food Dollar Series,” Anderson said. Details about USDA’s new Food Dollar Series may be found online at http://www.ers.usda.gov/publications/err-economic-research-report/err114.aspx.