Retail Food Prices Decrease In Fourth Quarter

Press release from Indiana Farm Bureau

(Undated) - Grocery store prices declined slightly during the fourth quarter of 2011, according to a quarterly survey from Farm Bureau.

Indiana Farm Bureau’s latest “market basket” survey, an informal survey of grocery prices released every quarter, shows that the 16 food items on the survey cost an average of $49.60 cents, down 73 cents from the 3rd quarter survey.

Of the 16 items on the survey, 11 decreased in price.

The IFB survey is part of a nationwide survey compiled by the American Farm Bureau Federation from data supplied by state Farm Bureaus. The national survey reported an even larger decrease: The total cost of 16 food items was $49.23, down $3.89 or about 7 percent compared to the third quarter of 2011.

This is the first decrease the survey has shown since the 2nd quarter of 2010, when the total was $43.81.

“We have seen consistently higher prices quarter to quarter on a broad range of market basket items,” said AFBF senior economist John Anderson. “With this survey, that trend appears to have reversed. While the market basket 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.”

“It is interesting to note that majority of the items decreasing in price are protein foods as well as foods that have the least amount of processing,” said Isabella Chism, IFB 2nd vice president, who with her husband, Kent, farms in Howard County. “Farmers, producers as well as consumers, are hoping this is a sign of market stabilization and the law of supply and demand will again dictate food prices.”

The item that decreased the most was potatoes, which dropped by 94 cents to $2.65 per 5-pound bag. Other fruit and vegetable products showing a decrease were apples, down by 20 cents per pound to $1.88, and a half-gallon of orange juice, down 7 cents to $3.23.

But many of the decreases were for meat and dairy products. Boneless chicken breasts were down by 25 cents per pound to $2.90; sliced deli ham dropped by 24 cents per pound to $5.02; 1 pound of shredded cheddar cheese dropped by 16 cents to $4.08; a gallon of whole milk dropped by 14 cents to $3.27; and ground chuck dropped by 3 cents per pound to $2.94.

Also showing decreases were white bread, down 30 cents for a 20-ounce loaf to $1.49; flour, down 20 cents for 5 pounds to $2.51; and cereal, down 16 cents per 10-ounce box to $3.08.

The largest increase was in vegetable oil, which increased by 85 cents per 32-ounce bottle to $4.05. Other items that increased were sirloin tip roast, up 39 cents per pound to $4.41; eggs, up 32 cents to $1.90 per dozen; bagged salad mix, up 30 cents for a 1-pound bag to $2.18; and bacon, up 9 cents per pound to $4.01.

 “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.”

Farm Bureau’s market basket survey isn’t intended to be a definitive survey but is rather a snapshot of food prices in Indiana and other participating states. However, the year-to-year direction of the survey tracks with the federal government’s Consumer Price Index (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 www.ers.usda.gov/Data/FoodDollar/app/.

AFBF, the nation’s largest general farm organization, has been conducting the informal quarterly market basket survey of retail food price trends since 1989. The mix of foods in the market basket 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. Twenty-two volunteer shoppers participated in IFB’s survey.

Items

3rd quarter 2011

4th quarter 2011

Apples, 1 lb.

$2.08

$1.88

Potatoes, 5 lb.

$3.59

$2.65

Bagged salad mix, 1 lb.

$1.88

$2.18

Orange juice, 1/2 gal

$3.30

$3.23

Ground chuck, 1 lb.

$2.97

$2.94

Sirloin tip roast, 1 lb

$4.02

$4.41

Bacon, 1lb.

$3.92

$4.01

Sliced deli ham, 1 lb.

$5.26

$5.02

Boneless chicken breast, 1 lb.

$3.15

$2.90

Whole milk, 1 gal.

$3.40

$3.27

Shredded cheddar cheese, 1 lb.

$4.24

$4.08

Grade A  large eggs, 1 doz.

$1.58

$1.90

Flour, 5 lb.

$2.71

$2.51

Vegetable oil, 32 oz.

$3.20

$4.05

Cereal, 10-oz. box

$3.24

$3.08

White bread, 20-oz. loaf

$1.79

$1.49

TOTAL

$50.33

$49.60