OK, the average cost of 16 basic grocery items, that you buy at your local supermarket, increased by $2.10 over last quarter’s cost during the American Farm Bureau Federation’s (AFBF) Marketbasket Survey conducted in May. This is no time to panic and I urge everyone to remain calm and step away from your calculators. Your food is still a major bargain and I am here to tell you why.
A recent news release from AFBF reports that the $51.17 average paid by shoppers is up $2.10 or about 4 percent compared to the first quarter of 2011. Of the 16 items surveyed, 14 increased and two decreased in average price compared to the prior quarter. The total average price for the 16 items was up about 8 percent compared to one year ago.
The two items that decreased in average retail price between the quarters were boneless chicken breasts, which went down 23 cents to $3.09 per pound; and shredded cheese, that saw a drop of seven cents to $4.56 per pound. So I guess if you are looking for a less expensive meal these days, then you need to try something with chicken with cheese scattered over it.
Food costs over the years has made a very slow inch upward.But with the widespread drought in key cattle producing regions, small stocks and delayed plantings of some crops due to cool weather in other areas and the continued energy cost increases, the food industry is not being spared any longer from rising prices and consumers are starting to feel a pinch in their pocketbook at the grocery stores. AFBF Economist John Anderson explained in the organization’s release, “After food leaves the farm, costs for transportation, marketing, processing and storage come into play.”
Over the last few years livestock numbers have also decreased. Tighter wholesale meat supplies due to smaller livestock herds along with recovering meat demand contributed to modest retail price increases for pork and some dairy products in 2010 and that trend is continuing this year. Four items, (sirloin tip roast, Russet potatoes, sliced deli ham and bacon) accounted for most of the quarter-to-quarter increase. Other items that increased in price compared to the first quarter were ground chuck, up 19 cents to $3.29 per pound; whole milk, up 16 cents to $3.62 per gallon; vegetable oil, up 13 cents to $3.01 for a 32-ounce bottle; toasted oat cereal, up 12 cents to $3.17 for a 9-ounce box; apples, up 11 cents to $1.56 per pound; orange juice, up four cents to $3.18 for a half-gallon; eggs, up three cents to $1.65 per dozen; bread, up two cents to $1.86 for a 20-ounce loaf; bagged salad, up one cent to $2.67 per pound; and flour, up one cent to $2.52 for a 5-pound bag.
“Further retail price increases are likely to be the new normal as we move through 2011, especially for meats. It takes time for farmers to increase the size of their herds in order to meet higher demand,” Anderson explained.
The thing to remember as you pay at the cash register is that our farmers and ranchers provide abundant and affordable food products throughout the year, which is something that other countries can only wish for. And the farmers are doing it without a major return to themselves.
USDA says the “farmer’s share” of the food marketing bill at the grocery store or restaurant is 16 percent on average…lower for more highly processed items and higher for less processed items. The farmer’s share of the retail food dollar is as low as 2 percent to 3 percent for bread and cereal, and as much as 45 percent for some meat, milk and egg products. It is important that all of us, farmers and consumers, need to be able to see the true value and cost of our food. We sure don’t want to be importing it like our oil, because it is going to be easier for me to cut back on my trips to the mall than it is to cut back on my steak and potatoes.
Pettus L. Read is editor of Tennessee Home & Farm magazine and Tennessee Farm Bureau News. He may be contacted by e-mail at pread@tfbf.com