Food Prices Climb At Year-End

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MADISON – Retail food prices were up slightly at the end of 2010 according to the Wisconsin Farm Bureau’s Marketbasket Survey.

The Wisconsin Farm Bureau’s informal survey shows the total cost of 16 food items that can be used to prepare one or more meals was $45.61. It marked an increase of 48 cents, or one percent, from September’s $45.13 Marketbasket price.

Of the 16 items surveyed, 10 increased and six decreased in price compared to the third quarter of 2010.

Eggs, shredded cheddar cheese, ground chuck, vegetable oil, potatoes and toasted oat cereal were the items that saw the largest percentage increases in price compared to the prior quarter.

Large eggs increased 24 cents (18 percent) to $1.54 per dozen; shredded mild cheddar cheese increased 42 cents (11 percent) to $4.23 per pound; ground chuck increased 18 cents (6 percent) to $3.09 per pound; vegetable oil increased 13 cents (4 percent) to $2.84 per 32 oz. container; russet potatoes increased 6 cents (2 percent) to $2.14 per 5 lb. bag; and a box of toasted oat cereal climbed 8 cents (2 percent) to $2.95.

“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,” said John Anderson, an economist with the American Farm Bureau Federation.

Bacon, apples, flour and milk were the items that saw the largest percentage reductions in price compared to the third quarter of 2010.

A pound of bacon decreased by 42 cents (9.8 percent) to $3.84; a pound of red delicious apples fell 8 cents (5.8 percent) to $1.28; a 5 lb. bag of all-purpose flour declined by 11 cents (5 percent) to $2.09; and a gallon of whole milk was 13 cents lower (4 percent) at $2.91.

“The reduction in price for bacon we found in Wisconsin was expected,” said Casey Langan, spokesman for the Wisconsin Farm Bureau Federation. “There was great demand for bacon over the summer months when many restaurants add it to their menu items. Strong demand and tight supplies resulted in unusually high prices last September, a price reduction since then was reflected in the prices our shoppers reported in mid-December.”

“Yet pork prices are likely to climb again in 2011 as pork producers are not likely to increase their production in the near future,” Langan added.

According to the National Pork Board: “Productivity improvements will offset some of the reductions in the number of pigs coming to market, yet they will be insufficient to make up all the lost ground, let alone boost supplies enough to meet growing export and domestic pork demand.”

The American Farm Bureau Federation’s national survey of the same 16 items cost $46.97, which is over one dollar more than Wisconsin’s average ($45.61). However, six of the 16 items had higher prices in Wisconsin: shredded cheddar cheese, toasted oat cereal, ground chuck, boneless chicken breast, vegetable oil and flour.

Compared to a year ago, the total price of the national survey was up $4.07 (about 10 percent). Last summer the Wisconsin Farm Bureau altered the items it surveys to mirror that of the nation survey. Of the 12 items that are on the current and last year’s survey, the overall price jumped from $30.84 in late 2009 to $33.12 in late 2010, a 7 percent increase.

Food, like many other consumer items throughout our economy, experienced relatively stable prices for much of 2010. However, energy costs (a key component of food prices) began to rise in the fourth quarter of the year. Retail diesel prices were 10 percent higher at the end of December than at the end of September. Experts predict energy prices to continue to climb in 2011, which will likely pressure retail food prices to be higher this year as well.

Over the last three decades retail grocery prices have gradually increased, while the share of the average dollar spent on food that farm families receive has dropped. In the mid-1970s, farmers received about one-third of consumer retail food expenditures in grocery stores and restaurants. Since then, that figure has decreased steadily and is now just 19 percent, according to the U.S. Department of Agriculture.

Using that percentage across-the-board, the farmer’s share of this quarter’s $45.61 Marketbasket would be $8.67.

According to the USDA, Americans spend just under 10 percent of their disposable annual income on food, the lowest average of any country in the world.

The Marketbasket is a quarterly look at the trends in food prices in Wisconsin in relation to changing farm prices, weather and wholesale and retail food marketing. Members of the Wisconsin Farm Bureau collect price samples of 16 basic food items in 26 communities across Wisconsin.


Source: Wisconsin Farm Bureau

The Marketbasket survey is an informal measure of prices at grocery stores in Wisconsin. The prices reported reflect variations in communities and retailers. The prices reported are not validated by any outside source.



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