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Retail food prices dip slightly in second quarter

Agriculture.com Staff 07/10/2006 @ 9:31am

Retail prices for food at the supermarket dropped slightly in the second quarter of 2006, according to the latest American Farm Bureau Federation Marketbasket Survey. The informal survey shows the total cost of 16 basic grocery items in the 2006 second quarter was $39.91, down 1.5% or 60 cents from one year ago.

The surveyed items decreased 82 cents in the second quarter of 2006, following an increase of $1.90 in the first quarter of 2006. Of the 16 items surveyed, 11 decreased, four increased and one remained the same in average price compared to the 2006 first-quarter survey.

Cheddar cheese showed the largest decrease, down 38 cents to $3.51 per pound. Ground chuck was down 18 cents to $2.66 per pound, whole milk was down 12 cents to $3.04 per gallon, corn oil was down 12 cents to $2.80 per 32-ounce bottle, sirloin tip roas was down 11 cents to $3.74 per pound, and flour was down 10 cents to $1.63 per 5-pound bag. Vegetable oil, eggs, pork chops and bacon also went down in price.

On the other hand, russet potatoes increased 27 cents in price to $2.51 per 5-pound bag. White bread, apples, and whole fryer chickens also went up in price.

"Decreased retail prices for cheddar cheese and milk during this quarter reflect underlying lower prices paid to producers at the farm gate," said AFBF Senior Economist Terry Francl. "Higher energy prices passed along by food processors to consumers likely contributed to increased retail costs for several items."

The share of the average food dollar that America's farm and ranch families receive has dropped over time, despite gradual increases in retail grocery prices. "Going back to the mid-1970s, farmers received an average of one-third of consumer retail food expenditures. That figure has dropped steadily over time and is now just 22%, according to USDA statistics," Francl said.

That means the farmer's share of this quarter's $39.91 marketbasket total would be $8.78.

AFBF, the nation's largest general farm organization, conducts its informal quarterly marketbasket survey as a tool to reflect retail food price trends. According to Agriculture Department statistics, Americans spend just 9.5% of their disposable income on food annually, the lowest average of any country in the world. A total of 68 volunteer shoppers in 32 states participated in this latest survey, conducted during May.

Retail prices for food at the supermarket dropped slightly in the second quarter of 2006, according to the latest American Farm Bureau Federation Marketbasket Survey. The informal survey shows the total cost of 16 basic grocery items in the 2006 second quarter was $39.91, down 1.5% or 60 cents from one year ago.

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