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AFBF study says U.S. food prices down 3 percent by end of 2012
By STEVE BINDER
Illinois Correspondent

WASHINGTON, D.C. — When she shopped recently at her local Schnucks grocery store in southern Illinois, Becky Andersen didn’t hesitate to scoop up 10 packages of brand-name bacon on sale for $2.99 each.

“I haven’t seen Oscar Meyer bacon at this price for a little while, and I’ve got plenty of room in my freezer, so I’m stocking up,” said Andersen, a mother of three.

Thanks in part to a slight drop in bacon prices, retail food prices overall dropped by about 3 percent during the last quarter of 2012, giving consumers like Andersen a little bit of a break on their pocketbooks.

The decline was documented through the American Farm Bureau Federation’s (AFBF) regular price-tracking program, called the Marketbasket Survey. A total of 16 food items that can be used to prepare one or more meals are tracked each quarter, and for the fourth quarter of 2012 those 16 items cost a total of $50.54, down about $1.36 from the third quarter.

Of the 16 items surveyed, 10 decreased in price and six rose slightly; fruits and vegetables led the decline.

“Throughout 2012, food prices were relatively stable, thanks to very slow but steady growth in the general economy, coupled with fairly stable energy prices,” said John Anderson (no relation to Becky Andersen), an economist with the AFBF.

“For this year, we expect food prices to rise by 3 to 4 percent, which is slightly higher than the average rate of inflation over the past 10 years.”

That tracks with predictions last month from the USDA, which stated it believes food prices will rise an average of 3 percent for all of 2013.

Food products that declined in the last quarter of 2012 included Russet potatoes, down 39 cents to $2.62 for a five-pound bag; bagged salad, down 35 cents to $2.59 per pound; deli ham, down 31 cents to $4.89 per pound; apples, down 26 cents to $1.60 per pound; and sirloin tip roast, down 22 cents to $4.52 per pound.
Others were flour, down 20 cents to $2.37 for a five-pound bag; chicken breasts, down 7 cents to $3.10 per pound; vegetable oil, down 5 cents to $2.86 for a 32-ounce bottle; eggs, down 4 cents to $1.90 per dozen; and bacon, down 2 cents to $4.21 per pound.
Products that went up in price included whole milk, up 18 cents to $3.73 per gallon; orange juice, up 11 cents to $3.41 per half-gallon; white bread, up 10 cents to $1.85 for a 20-ounce loaf; ground chuck, up 8 cents to $3.55 per pound; shredded cheddar cheese, up 5 cents to $4.31 per pound; and toasted oat cereal, up 3 cents to $3.03 for a nine-ounce box.

While retail food prices generally increase year-over-year, the share of retail dollars spent on food that goes to farmers and ranchers continues to drop, Anderson said.

“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,” he added. “Since then, that figure has decreased steadily and is now about 16 percent,” according to the USDA.

The AFBF has been conducting the quarterly surveys since 1989. A total of 107 shoppers in 31 states participated in the latest survey.
1/16/2013