Global Demand Drives Food Prices Higher in Third Quarter
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Meat and dairy products accounted for about 40 percent of the quarter-to-quarter retail price increase. Boneless chicken breasts increased 24 cents to $3.33 per pound, bacon rose 23 cents to $4.41 per pound, sliced deli ham was up 17 cents to $5.43 per pound, shredded cheddar increased 14 cents to $4.70 per pound and whole milk was up 4 cents to $3.66 per gallon.
Other items that increased in price compared to the second quarter were Russet potatoes, up 36 cents to $3.43 for a 5-pound bag; Red Delicious apples, up 27 cents to $1.83 per pound; flour, up 21 cents to $2.73 for a 5-pound bag; vegetable oil, up 20 cents to $3.21 for a 32-ounce bottle; eggs, up 13 cents to $1.78 for one dozen; orange juice, up 10 cents to $3.28 for a half-gallon; bagged salad, up 6 cents to $2.73 for 1-pound bag; and bread, up 2 cents to $1.88 for a 20-ounce loaf.
“At the beginning of 2011, a number of factors including growing demand pointed to continued increases in retail food prices, especially for meats. But there's always a lag time as farmers and ranchers increase the size of their herds to meet higher demand,” Anderson explained. “Extreme weather conditions around the nation have further compounded the issue, diminishing production and further increasing costs.”
Most items showing an increase in retail price from quarter-to-quarter also showed year-to-year increases. Compared to one year ago, Russet potatoes increased 30 percent; flour was up 27 percent; eggs and vegetable oil were each 26 percent higher. Year-to-year increases were also tallied for bacon, up 21 percent; sliced deli ham and milk, each up 16 percent; and shredded cheddar cheese, up 15 percent. The total average price for the 16 items was up about 15 percent compared to one year ago.
Two items decreased in price: sirloin tip roast dropped 20 cents to $4.28 per pound and ground chuck dropped 2 cents to $3.27 per pound. Toasted oat cereal remained the same in price, at $3.17 for a 9-ounce box.
The year-to-year direction of the Marketbasket Survey tracks with the federal government's Consumer Price Index (http://www.bls.gov/cpi/) report for food at home. As retail grocery prices have increased gradually over time, the share of the average food dollar that America's farm and ranch families receive has dropped.
“In 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. USDA's new Food Dollar Series may be found online at http://www.ers.usda.gov/Data/FoodDollar/app/.
Using the “food at home and away from home” percentage across-the-board, the farmer's share of this quarter's $53.12 marketbasket would be $8.50.
Tracking Milk and Egg Trends
For the third quarter of 2011, shoppers reported the average price for a half-gallon of regular whole milk was $2.46, up 15 cents from the prior quarter. The average price for one gallon of regular whole milk was $3.66, up 4 cents. Comparing per-quart prices, the retail price for whole milk sold in gallon containers was about 25 percent lower compared to half-gallon containers, a typical volume discount long employed by retailers.
The average price for a half-gallon of rBST-free milk was $3.40, up 12 cents from the last quarter, about 40 percent higher than the reported retail price for a half-gallon of regular milk ($2.46).
The average price for a half-gallon of organic milk was $3.71, up 6 cents compared to the prior quarter, about 51 percent higher than the reported retail price for a half-gallon of regular milk ($2.46).
Compared to a year ago (third quarter of 2010), the retail price for regular milk in gallon containers was up about 16 percent while regular milk in half-gallon containers rose 19 percent. The average retail price for rBST-free milk increased 1 percent compared to the prior year while organic milk was up 2 percent.
For the third quarter of 2011, the average price for one dozen regular eggs was $1.78, up 13 cents compared to the prior quarter. The average price for a dozen “cage-free” eggs was $3.10, down 10 cents compared to the prior quarter but 75 percent higher than regular eggs. Compared to a year ago (third quarter of 2010), regular eggs increased 26 percent while “cage-free” eggs increased 7 percent.