Grocery prices dropped significantly this spring, according to an informal survey conducted by Indiana Farm Bureau.
The May survey showed a total price of $37.42 for a "market basket" of 16 basic food items. This is $1.20 lower than the cost of the same items in March 2005 and $1.50 below the total from August 2004, which marked the highest-ever total for the survey.
Terry Francl, senior economist with the American Farm Bureau Federation, attributed part of the overall decrease in the second quarter of 2005 to a general drop in meat, dairy and poultry prices. All meats included on the survey decreased in price except for pork chops, which rose by 50 cents to $2.83 per pound. Sirloin tip roast, however, dropped by 7 cents to $3.55 per pound, bacon dropped by a penny per pound to $3.07, and ground chuck dropped 20 cents/pound to $2.21.
Likewise, dairy and poultry prices decreased except for cheddar cheese, which rose by 9 cents to $3.72 per pound. Eggs dropped by 16 cents to 72 cents/dozen, milk went down 36 cents per gallon to $2.59, and whole chicken fryers decreased by 41 cents to 80 cents per pound.
"The decline in the majority of meat, poultry and dairy prices reflect seasonal pressures at the producer level," says Francl. Among the items showing a significant increase were corn oil, up by 41 cents to $3.19 for a 32-ounce bottle, and vegetable oil, up 23 cents to $2.58 per 32-ounce bottle "Vegetable oil prices have risen as it became apparent that the South American soybean crop was smaller than anticipated," Francl adds. "Furthermore, concerns about the spread of Asian soybean rust in the United States in 2005" - rust is a destructive fungus that first appeared in the mainland U.S. late in 2004 - "have prompted higher-than-normal risk premiums/prices for domestic soybeans and processed oil."
The IFB survey is part of a national survey coordinated by the American Farm Bureau Federation. Volunteer shoppers from more than 22 states, including
He adds that 30 years ago farmers received about one-third of consumer retail food expenditures. According to the most recent Agriculture Department statistics,
Considering how volatile many other expenditures are, food prices are amazingly stable in the
"Many Americans don't realize how little food prices actually change," says Hegel. "The price of non-food items has increased considerably since 1990, as has the price for processed foods. But basic food items are a bargain. "Unfortunately," she adds, "the farmers' cost for producing that food has increased dramatically while the farmer's share of the food dollar has steadily decreased. So while farmers also enjoy the cheap, safe and abundant food available in this country, they know that it comes at a cost, and part of that cost is borne by the farmers themselves."
American Farm Bureau Federation