Beech Tree News Network

The latest Marketbasket Survey, conducted by the Kentucky Farm Bureau Federation in September 2011, indicates that average retail food prices in supermarkets across the state have stabilized during this last quarter. After reaching a record high for total price in June, the four-decade-old survey’s third quarter review indicates that the total average price has now declined by 0.3 percent.

According to the survey results, the total cost of 40 basic grocery items was $117.06. This total reflects a decrease of $0.38, or 0.3 percent, over the same list of items reported in the second quarter of 2011. The third quarter 2011 Marketbasket total is, however, still $10.56, or 9.9 percent, higher than the same reporting period in 2010, and $11.79, or 11.2 percent, higher than the third quarter of 2009.

Twenty of the 40 items on the survey experienced decreases in average price, three were unchanged (gallon of 2% milk, 10 oz. frozen corn, and 32 oz. corn oil), and just 17 items increased.

Of the six food groups recorded in the survey – beef, dairy, fruits and vegetables, grain, pork, and poultry – the dairy category showed the greatest total increase with an average price jump of 4.0 percent. Vanilla ice cream made the largest single-item increase with an average price jump of $0.40 per half-gallon. The largest single-item decrease was for sausage, dropping an average of $0.41 per two-pound roll.

The Marketbasket survey’s top five average price increases reported for items in the third quarter of 2011 were:

ITEM                                   JUN 2011                  SEP 2011                  PRICE INCREASE
Vanilla Ice Cream            $3.24 / 1/2-gal.       $3.64 / 1/2-gal.      +$0.40 / 1/2-gal.
+12.3%

Idaho Potatoes               $4.44 / 10 lbs.        $4.82 / 10 lbs.        +$0.38 / 10 lbs.
+8.6%

Grade A, Large Eggs        $1.38 / doz.            $1.73 / doz.           +$0.35 / lb.
+25.4%

American Cheese            $3.05 / 24 slices      $3.39 / 24 slices      +$0.34 / 24 slices
+11.2%

Grade A, Ex. Large Eggs   $1.63 / doz.            $1.96 / doz.            +$0.33 / lb.
+20.3%

The Marketbasket survey’s top five average price decreases reported for items in the third quarter of 2011 were:

ITEM                                   JUN 2011                   SEP 2011                 PRICE DECREASE
Sausage                        $5.63 / 2-lb. roll      $5.22 / 2-lb. roll      -$0.41 / 2-lb. roll
-7.9%

Sliced Bacon                   $4.33 / lb.             $3.97 / lb.              -$0.36 / lb.
-9.1%

Whole Wheat Bread          $2.06 / lb.             $1.82 / lb.              -$0.24 / lb.
-13.2%

Lettuce                          $1.46 / head          $1.23 / head           -$0.23 / head
-18.7%

White Bread                    $1.62 / lb.              $1.39 / lb.              -$0.23 / lb.
-16.6%

While Kentucky retail food prices have steadily grown higher through the first half of this year, the third quarter’s stabilization is a deviation from the current national trend. Based on the U.S. Department of Labor’s Bureau of Labor Statistics’ most recent Consumer Price Index data released in mid-September (which reflects figures through August 2011), national food prices increased by 0.5 percent in the last reported month and climbed a total of 4.6 percent over the past 12 months.

Though food prices have a myriad of market factors that impact total retail pricing, many of today’s noticeable price boosts can be directly linked to the necessary role that energy and transportation have in food production – and their associated changes in cost, too. The Bureau of Labor Statistics reports that energy costs jumped 18.4 percent and gasoline prices surged by 32.4 percent over the last 12 months.

“On-farm production costs for energy, fertilizer and fuel continue on an upward trend but those costs are largely borne by farmers and ranchers,” said American Farm Bureau Federation economist, John Anderson. “As long as these costs remain elevated, consumers will continue to feel it in the form of higher food prices at the supermarket.”

Despite the recent rise in retail food prices experienced nationwide, Americans continue to enjoy some of the lowest food prices in the world and spend only about 10 percent of their disposable income on food each year. U.S. food costs remain far lower than that of other countries thanks in large part to agricultural efficiencies utilized in America. Putting those efficiencies to use currently allows the average U.S. farmer to produce enough food and fiber to provide for about 155 people. In 1980 each farmer only produced enough food and fiber for 115 people, and that output drops to just 19 people when looking back to 1940.

Yet while more food is now being produced on less land, the farmer’s share of the retail food dollar in America is down. According to the U.S. Department of Agriculture’s new Food Dollar Series, a farmer earns less than 16 cents per dollar spent on food, down significantly from the 31 cents earned as recently as 1980.

Kentucky Farm Bureau Federation has conducted its regional Marketbasket survey over the past four decades as a tool to reflect local retail food pricing trends and their relationship to what farmers receive for their raw commodities. Cities reporting on the Kentucky Farm Bureau Marketbasket Survey for the third quarter of 2011 include: Augusta, Bardstown, Bowling Green, Brandenburg, Brownsville, Campbellsville, Eddyville, Edmonton, Elizabethtown, Elkton, Falmouth, Glasgow, Grayson, Harrodsburg, Hillview, Hopkinsville, Madisonville, Mayfield, Maysville, Munfordville, Owensboro, Owingsville, Paris, Richmond, Russellville, Shelbyville, Somerset and Walton.