The study, which is conducted informally in the fall, shows the total costs of 16 items that can be used to prepare a meal. The total, $54.14, is down 12 cents from the same survey conducted a year ago.
Lower prices on whole milk, bacon, apples, shredded cheddar cheese, flour, bagged salad, vegetable oil, russet potatoes, white bread and chicken breast contributed heavily to the decrease, while increases in the price of eggs, orange juice, toasted oat cereal and meat helped stabilize the total with last year’s survey findings.
A similar survey conducted for the state by Kentucky Farm Bureau found that prices for the 40 grocery items it tested were down 4.2 percent from the same test in the previous year. The total amount required to purchase these items was $121.64. The Kentucky survey shows a 3.5 percent drop between the second and third quarter of 2015, as well.
Leigh Maynard, professor and chair of the University of Kentucky Department of Agricultural Economics, said the decreases seen in this study are the result of many factors, though he cited lower energy costs as the largest contributor. He predicted prices for retail food for next year will be "very similar or very slightly down," based on better than expected yields for grain crops, lower costs of feeding livestock and a large expected spring grain crop from South America.
In the Kentucky survey, decreasing prices were seen across all commodities except for poultry and dairy products. Grains declined 9 percent, beef fell 7.5 percent and pork decreased 4.3 percent. Helping to stabilize that number were increases in poultry by 2.4 percent and dairy by 2.2 percent.
Both the national and Kentucky surveys, when correlated with the USDA’s Food Dollar Series, show American farmers are still seeing decreases in the shares they receive from what is spent on retail food.
In a steady decline from the 1970s – when farmers received one-third of consumer retail dollars spent – they are now getting back approximately 16 cents per $1, meaning farmers would receive approximately $8.66 of the $54.14 total American Marketbasket Survey expenditure.
Maynard attributes the decline in producers’ share to a "constant march in technological progress," both in production and in processing. According to him, through technological advances farmers are becoming more efficient at producing crops with fewer resources and are seeing better yields.
Additionally, advances in processing and packaging are driving the retail costs of food up with no monetary benefit to producers.
Looking to the future, Maynard sees the decreases in the farm share of retail food dollars having a large impact on the structure of farms. He said it’s likely more farms will work to become larger and more efficient, producing more to outweigh the lowering returns.
He predicted smaller farms will attempt to find success growing niche products or using different livestock practices, such as grass-fed, to reach a premium consumer.
Farm Bureau Marketbasket studies have been taken quarterly since 1989. They are broken into a Spring Picnic survey, Summer Cookout survey, Fall Harvest survey and Thanksgiving survey.
