First Marketbasket Survey of 2018 shows slight increase in food prices

Posted on Mar 22, 2018

 

For the first time in nearly two years, Kentucky Farm Bureau’s (KFB) Marketbasket Survey indicated food prices increased slightly during the first quarter of 2018.

Each quarter, 40 basic food items are price-checked throughout the state to gauge current food-price trends. Since the end of 2016, surveyed food items had dropped by a total of $3.79 or just over three percent.

This upward movement in food prices amounts to 1.35 percent or $1.56 more than the price of the same items surveyed during the last quarter of 2017. The total price for all 40 items came to $115.67. While this current survey indicates a rise in prices, as compared to a year ago at the same time, this increase amounts to less than a quarter of a percent.

This increase is somewhat in contrast to what is being experienced on a national level. The latest Consumer Price Index report noted slight declines in most food categories.

Specifically, the CPI indicated, “All six major grocery store food group indexes declined in February. The index for fruits and vegetables declined 0.5 percent after rising 0.5 percent in January. The index for dairy and related products declined 0.3 percent in February after being
unchanged in January. The index for meats, poultry, fish, and eggs fell 0.2 percent in February. The indexes for cereals and bakery products, nonalcoholic beverages, and other food at home all declined 0.1 percent in February.”

This slight CPI decrease comes on the heels of an increase of 1.6 for the food index in 2017.

Marketbasket Survey specifics:

The first quarter increases in Kentucky were led by the beef, pork, and fruits and vegetable categories with rises of 3.19 percent, 2.51 percent and 6.19 percent respectively. The fruit and vegetable increase comes after two consecutive quarterly drops amounting to more than seven percent. Dairy however, saw a 5.8 percent decrease in prices, a trend that goes back to the third quarter of 2016.

While consumers have noticed, and taken advantage of the lower dairy prices that have existed over the last six quarters, many dairy farmers are feeling the pinch on their farms due to low milk prices and changing market conditions.

During the first quarter of this year, all but one item in that category saw a decrease in price. The exception was a one-pound package of cheddar cheese which remained unchanged from the last survey.

Agricultural Economics in Food Prices:

Whether or not U.S. grocery prices fluctuate from one quarterly survey to the next, Kentuckians and all Americans continue to enjoy some of the lowest food prices in the world. Shoppers in the U.S. spend only about seven percent of their disposable income on food each year. Those costs remain far lower than any other country in the world thanks to many of the agricultural efficiencies utilized in America. Today the average U.S. farmer produces enough food and fiber to provide for about 154 people – a significant jump from an average of 19 people per farmer back in 1940.

Yet while more food is now being produced on less land, the farmer’s share of the retail food dollar in America is down. According to the USDA’s Food Dollar Series, a farmer earns less than 17 cents per dollar spent on food, down significantly from the 31 cents earned in 1980.