It’s bad news for consumer budgets: food prices are steadily raising. But is it disaster – or consumer optimism – that’s behind the uptick?
According to the latest Marketbasket Survey from the American Farm Bureau Federation (AFBF), prices are up 3 percent from last year.
In particular, consumers reported higher prices for dairy and poultry products.
“Several poultry and dairy product items increased in price during the second half of the year, accounting for much of the increase in the marketbasket,” said John Anderson, AFBF’s deputy chief economist. “As anticipated, food prices have increased by about 3 percent so far during the year, which is slightly higher than the average rate of inflation over the past 10 years,” he said.
Unfortunately for farmers, as retail grocery prices increase, the share of the average food dollar that America’s farm and ranch families receive drops.
“Through 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 about 16 percent, according to the Agriculture Department’s revised Food Dollar Series,” Anderson said.
The reason behind the higher food prices could be consumers, according to AFBF economist John Anderson.
In an interview with AFBF “Newsline,” Anderson says that agriculture hasn’t had any major weather disasters so far this year, so the issue with climbing food prices isn’t supply. Instead of has more to do with consumers – perhaps a sign of consumer optimism.
“I think the market is somewhat in transition right now and most of the activity is really on the demand side, what’s going on with consumers,” Anderson said. “There are opportunities to get out there and find bargains. It’s something that I tell people all the time.”
He added, “Retailers particularly lately I think have been very aggressive at featuring certain products and offering really good deals and attractions to get people into their store and it really pays to shop around and look at what’s featured and find ways to stretch your dollar.”