Retail staple food prices increased in fourth quarter of 2010

WASHINGTON — Retail food prices at the supermarket increased slightly during the fourth quarter of 2010, 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 $46.97, up 80 cents or about 2 percent compared to the third quarter of 2010.

Of the 16 items surveyed, nine increased, six decreased and one remained the same in average price compared to the prior quarter. The total average price for the 16 items was up $4.07 (about 10 percent) compared to one year ago.

Breakfast foods

Bacon, eggs, whole milk, sliced deli ham and bread increased the most in dollar value compared to the third quarter. Bacon increased 68 cents to $4.32 per pound; eggs and whole milk increased 19 cents to $1.60 per dozen and $3.35 per gallon, respectively; sliced deli ham increased 18 cents to $4.84 per pound; and bread increased 14 cents to $1.75 for a 20-ounce loaf.

“Hearty breakfast lovers felt the pinch in the fourth quarter of 2010,” said AFBF economist John Anderson. “Increased consumer demand for meats and dairy products that began in 2009 continued through the fourth quarter of 2010.

“Wholesale meat supplies remained tight in the fourth quarter of the year, due to smaller livestock herds and poultry flocks, which also contributed to the retail price increases our volunteer shoppers reported.”

Other items that increased in price since the third quarter were sirloin tip roast, up 9 cents to $3.95 per pound; shredded cheddar cheese, up 7 cents to $4.16 per pound; toasted oat cereal and vegetable oil, up 4 cents each to $2.88 for a 9-ounce box and 32-ounce bottle, respectively.

Most items showing an increase in retail price from quarter-to-quarter also showed year-to-year increases. Compared to one year ago, bacon was up 44 percent, eggs were up 4 percent, whole milk was up 10 percent and sliced deli ham was up 11 percent.

“Increasing our nation’s livestock herd to meet the growing demand for meat and dairy products takes time, so we are likely to see retail prices continue to increase for some foods throughout 2011,” Anderson said.

Decreases

Six foods decreased slightly in price compared to the prior quarter: boneless chicken breasts, down 34 cents to $3.10 per pound; flour, down 16 cents to $1.99 for a 5-pound bag; Russet potatoes, down 13 cents to $2.50 for a 5-pound bag; ground chuck, down 10 cents to $2.83 per pound; and bagged salad, down 6 cents to $2.69 per pound. Orange juice remained the same in price at $2.97 for a half-gallon.

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.

“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 just over 20 percent, according to Agriculture Department statistics,” Anderson said.

Farmer’s share

Using the “food at home and away from home” percentage across-the-board, the farmer’s share of this quarter’s $46.97 marketbasket would be $9.39.

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 92 shoppers in 29 states participated in the latest survey, conducted in late October/early November.

Milk and eggs

For the fourth quarter of 2010, shoppers reported the average price for a half-gallon of regular whole milk was $2.24, up 20 cents from the prior quarter.

The average price for one gallon of regular whole milk was $3.35, up 19 cents. Comparing per-quart prices, the retail price for whole milk sold in gallon containers was about 25 percent lower compared to half-gallon containers, a typical volume discount long employed by retailers.

The average price for a half-gallon of rBST-free milk was $3.10, down 26 cents from the last quarter, about 40 percent higher than the reported retail price for a half-gallon of regular milk ($2.24).

Organic

The average price for a half-gallon of organic milk was $3.60, down 2 cents compared to the prior quarter — about 60 percent higher than the reported retail price for a half-gallon of regular milk ($2.24).

Compared to a year ago (fourth quarter of 2009), the retail price for regular milk in gallon containers was up about 10 percent while regular milk in half-gallon containers increased 13 percent.

The average retail price for rBST-free milk went up and down over the quarters and was essentially unchanged in a year’s time. The average retail price for organic milk in half-gallon containers was stable throughout the year, fluctuating by just a few cents.

Eggs

For the fourth quarter of 2010, the average price for one dozen regular eggs was $1.60. The average price for a dozen “cage-free” eggs was $3.07, about 90 percent higher than regular eggs.

Compared to a year ago (fourth quarter of 2009), regular eggs increased 3 percent while “cage-free” eggs increased 11 percent.

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