Retail Farm Basket Value Up

WASHINGTON - Mar 18/04 - MFB -- Retail prices for food at the supermarket rose in the first quarter of 2004, according to the latest American Farm Bureau Federation (AFBF) marketbasket survey. The informal survey on the total cost of 16 basic grocery items showed an increase of $2.41 from the 2003 fourth quarter survey.

The $39.84 average paid by volunteer shoppers for the 16 items is also $3.78 higher than the 2003 first quarter survey average of $36.06. While survey averages have increased over the last year, food remains affordable overall. Since its inception in 1989, the AFBF marketbasket survey average has increased at a rate lower than other cost-of-living increases.

Of the 16 items surveyed, 13 increased, two decreased and one remained the same in average price compared to the 2003 fourth quarter survey.

Vegetable oil showed the largest increase, up 48 cents to $2.76 per 32-oz. bottle, followed closely by corn oil, up 46 cents to $3.09 per 32-oz. bottle.

"The higher vegetable oil prices reflect the impact of drastically reduced domestic and international stocks of soybeans and the resulting upward pressure on soybean oil prices," said AFBF Senior Economist Terry Francl. "This upward trend in vegetable oil prices at the retail level will likely continue, as carry-over soybean stocks at the end of this crop year (Sept. 1) are projected to be the lowest in more than 25 years."

Francl said a substantial portion of the increase in overall food prices can be attributed to the general upward trend in energy prices, which directly affects costs associated with food processing and distribution. After falling 21 cents in the fourth quarter of 2003, flour rose 28 cents, to $1.62 per 5-pound bag.

Other items that increased in price included:

- Apples, up 24 cents to $1.22 per pound;

- Whole fryers, up 22 cents to $1.24 per pound;

- Pork chops, up 19 cents to $3.42 per pound;

- Eggs, up 19 cents to $1.57 per dozen;

- Cheddar cheese, up 9 cents to $3.46 per pound;

- Bacon, up 9 cents to $3 per pound;

- Mayonnaise, up 7 cents to $3.27 per 32-oz. jar;

- Russet potatoes, up 6 cents to $1.96 per pound;

- Bread, up 5 cents to $1.36 per 20-oz. loaf; and

- Sirloin tip roast, up 2 cents to $3.52 per pound.

Two items showed decreases in average price. After rising 26 cents in the fourth quarter of 2003, milk dropped 2 cents to $2.87 per gallon. After rising 29 cents in the fourth quarter of 2003, ground chuck dropped 1 cent to $2.48 per pound.

After dropping 1 cent in the fourth quarter of 2003, toasted oat cereal remained the same in price, at $3 per 10-oz. box.

Despite steady increases in grocery store average prices over time, the share of the average food dollar received by America's farm and ranch families has actually dropped.

"This reflects a long-standing trend," said Francl. "Thirty years ago farmers received one-third of consumer retail food expenditures."

According to the most recent Agriculture Department statistics, America's farmers and ranchers receive just 19 cents out of every dollar spent for food. Using that across-the-board percentage, the farmer's share of this quarter's marketbasket average total of $39.84 would be about $7.57.

AFBF, the nation's largest general farm organization, conducts its informal quarterly marketbasket survey as a tool to reflect retail food price trends. A total of 112 volunteer shoppers in 32 states, including Michigan, participated in this latest survey, conducted in late February and early March.

Copyright (c) 2004 Michigan Farm Bureau

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