Retail Food Prices Drop in Second Quarter
WASHINGTON - Retail prices for food at the supermarket dropped 2.5 percent in the second quarter of 2004, according to the latest American Farm Bureau Federation (AFBF) market basket survey. The informal survey on the total cost of 16 basic grocery items showed a decrease of 99 cents from the 2004 first-quarter survey.
The $38.85 average paid by volunteer shoppers for the 16 items is, however, $2.81 higher than the 2003 second-quarter survey average of $36.04. While the survey average has increased from a year ago, food remains affordable overall. Since its inception in 1989, the AFBF market basket survey average has increased at a rate lower than other cost-of-living increases. Of the 16 items surveyed, 11 decreased and five increased in average price, compared with the 2004 first-quarter survey.
Corn oil showed the largest decrease, down 51 cents to $2.58 per 32-ounce bottle. The average price for whole milk and large eggs dropped 37 cents each, to $3.50 per gallon and $1.20 per dozen, respectively. After rising 48 cents in the first quarter, vegetable oil decreased 32 cents, to $2.44 per 32-ounce bottle.
"While the cost of raw farm commodities is often a fraction of the price consumers pay for food, the decline in vegetable oil and milk prices also tracks with the lower prices farmers received this past month," said AFBF senior economist Terry Francl. "Looking at another example, after increasing for nine months, soybean prices dropped 85 cents per bushel or 8.9 percent from May to June, and corn prices dropped 4.5 percent," Francl said. "Milk prices received by farmers declined $1 per hundredweight, or 5.2 percent."
Other items that decreased in price:
-Russet potatoes, down 26 cents to $1.70 per five-pound bag;
-Toasted oat cereal, down 23 cents to $2.77 per 10-ounce box;
-Whole fryers, down 17 cents to $1.07 per pound;
-Ground chuck, down 13 cents to $2.35 per pound;
-Flour, down 11 cents to $1.51 per 5-pound bag;
-Pork chops, down eight cents to $3.34 per pound; and
-Mayonnaise, down four cents to $3.23 per 32-ounce jar.
Five items showed increases in average price. After rising nine cents in the first quarter, cheddar cheese rose 38 cents, to $3.84 per pound. Bacon rose 14 cents, to $3.14 per pound. Bread increased five cents, to $1.41 per 20-ounce loaf. Apples increased two cents, to $1.24 per pound. Sirloin tip roast rose one cent, to $3.53 per pound.
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 about 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. With that across-the-board percentage, the farmer's share of this quarter's market basket average total would be about $7.38.
AFBF, the nation's largest general farm organization, conducts its informal quarterly market basket survey as a tool to reflect retail food price trends. A total of 86 volunteer shoppers in 25 states participated in this latest survey, conducted in late May and early June.
The $38.85 average paid by volunteer shoppers for the 16 items is, however, $2.81 higher than the 2003 second-quarter survey average of $36.04. While the survey average has increased from a year ago, food remains affordable overall. Since its inception in 1989, the AFBF market basket survey average has increased at a rate lower than other cost-of-living increases. Of the 16 items surveyed, 11 decreased and five increased in average price, compared with the 2004 first-quarter survey.
Corn oil showed the largest decrease, down 51 cents to $2.58 per 32-ounce bottle. The average price for whole milk and large eggs dropped 37 cents each, to $3.50 per gallon and $1.20 per dozen, respectively. After rising 48 cents in the first quarter, vegetable oil decreased 32 cents, to $2.44 per 32-ounce bottle.
"While the cost of raw farm commodities is often a fraction of the price consumers pay for food, the decline in vegetable oil and milk prices also tracks with the lower prices farmers received this past month," said AFBF senior economist Terry Francl. "Looking at another example, after increasing for nine months, soybean prices dropped 85 cents per bushel or 8.9 percent from May to June, and corn prices dropped 4.5 percent," Francl said. "Milk prices received by farmers declined $1 per hundredweight, or 5.2 percent."
Other items that decreased in price:
-Russet potatoes, down 26 cents to $1.70 per five-pound bag;
-Toasted oat cereal, down 23 cents to $2.77 per 10-ounce box;
-Whole fryers, down 17 cents to $1.07 per pound;
-Ground chuck, down 13 cents to $2.35 per pound;
-Flour, down 11 cents to $1.51 per 5-pound bag;
-Pork chops, down eight cents to $3.34 per pound; and
-Mayonnaise, down four cents to $3.23 per 32-ounce jar.
Five items showed increases in average price. After rising nine cents in the first quarter, cheddar cheese rose 38 cents, to $3.84 per pound. Bacon rose 14 cents, to $3.14 per pound. Bread increased five cents, to $1.41 per 20-ounce loaf. Apples increased two cents, to $1.24 per pound. Sirloin tip roast rose one cent, to $3.53 per pound.
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 about 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. With that across-the-board percentage, the farmer's share of this quarter's market basket average total would be about $7.38.
AFBF, the nation's largest general farm organization, conducts its informal quarterly market basket survey as a tool to reflect retail food price trends. A total of 86 volunteer shoppers in 25 states participated in this latest survey, conducted in late May and early June.