Retail Food Prices Rise Slightly in First Quarter

Farmer's share of consumers' food dollars continues to decline - this quarter only $8.65 of a $45.54 marketbasket.

Published on: Apr 22, 2010
Retail food prices at the supermarket showed a modest increase during the first 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 a meal was $45.54, up $2.64 or 6% higher compared to the fourth quarter of 2009. Compared to one year ago, though, the total average price for the 16 items dropped by $1.87 or about 4 percent.

Of the 16 items surveyed, 14 increased and two decreased in average price compared to the prior quarter. Shredded cheddar cheese, deli ham, apples, vegetable oil, bacon, boneless chicken breasts and eggs increased the most in dollar value from quarter-to-quarter.

Shredded cheddar cheese increased 62 cents to $4.26 per pound; sliced deli ham increased 48 cents to $4.83 per pound; apples increased 25 cents to $1.50 per pound; vegetable oil increased 23 cents to $2.74; bacon and boneless chicken breasts increased 22 cents to $3.22 and $2.93 per pound, respectively; and eggs increased 19 cents to $1.74 per dozen.

"Improved demand for milk and dairy products here at home and from export markets was the driving factor behind higher retail prices found by our volunteer shoppers during the first quarter of the year," says AFBF economist John Anderson. "Higher retail prices for some meats were due to reduced supplies."

Other items that increased in price quarter-to-quarter were: flour, up 16 cents to $2.26 for a 5-pound bag; whole milk, up 11 cents to $3.15 per gallon; bagged salad, up 10 cents to $2.67 for a 1-pound bag; sirloin tip roast, up 9 cents to $3.69 per pound; Russet potatoes, up 8 cents to $2.26 for a 5-pound bag; orange juice, up 5 cents for a half-gallon to $2.98; and toasted oat cereal, up 2 cents to $2.97 for a 9-ounce box.

Compared to a year ago, eggs increased 16%; apples increased 11%; and toasted oat cereal increased 2%.

Two foods declined slightly in price compared to the prior quarter: white bread, down 11 cents to $1.71 for a 20-ounce loaf; and ground chuck, down 6 cents to $2.63 per pound.

Several items from the meat case decreased in price compared to one year ago: chicken breasts, down 13%; ground chuck, down 10.5%; and sirloin tip roast, down 7.5%.

Tracking Milk and Egg Trends
For the first quarter of 2010, shoppers reported the average price for a half-gallon of regular whole milk was $2, up 1 cent from the prior quarter. The average price for one gallon of regular whole milk was $3.15, up 14 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 $3.62, up 54 cents from the last quarter, more than 50% higher than the reported retail price for a half-gallon of regular milk.

The average price for a half-gallon of organic milk was $3.66, up 9 cents compared to the fourth quarter of 2009, and about 80% higher than the reported retail price for a half-gallon of regular milk.

Compared to a year ago, the retail price for regular milk in gallon containers was unchanged while regular milk in half-gallon containers decreased 8%. The average retail price for rBST-free milk increased about 13% in a year's time. The average retail price for organic milk in half-gallon containers dropped about 1% in the first quarter of 2010 compared to the prior year.

For the first quarter of 2010, the average price for one dozen regular eggs was $1.74. The average price for "cage-free" eggs was $2.91 per dozen, about 70% more per dozen than regular eggs. Compared to a year ago, regular eggs increased 16% while "cage-free" eggs were unchanged.

Farmer's share of food dollar
As retail grocery prices have increased gradually over time, the share of the average food dollar that America's farm families receive has dropped.

"From about 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 19%, according to Agriculture Department statistics," Anderson says.

Using the "food at home and away from home" percentage across-the-board, the farmer's share of this quarter's $45.54 marketbasket would be $8.65.

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% of their disposable annual income on food, the lowest average of any country in the world. A total of 73 shoppers in 30 states, including Michigan, participated in the latest survey, conducted in early March.