Kentucky’s retail food prices drop in first quarter Marketbasket SurveyPosted on Apr 21, 2015
This long-awaited price decrease broke a string seven consecutive quarters of increasing totals reported in KFB’s Marketbasket Survey, but is still 4.6 percent higher than the total reported at the same time last year.
Food price averages at the national level, according to the U.S. Department of Labor’s Bureau of Labor Statistics’ most recent Consumer Price Index (CPI) data, also reflected an overall decrease this month. The CPI shows food-at-home prices falling by 0.5 percent in its last report (March 2015). This 0.5 percent drop was also the largest single-month decline in the food-at-home index since April 2009. Overall, however, the CPI data shows that national prices for food-at-home increased by an overall total of 1.9 percent during the past 12 months.
The USDA’s Economic Research Service (ERS) predicts a steadying effect on food prices for the remainder of 2015 (based on the assumption of normal weather conditions). Food-at-home cost increases are forecast by the ERS to keep pace with, or end up slightly below, average food price inflation and are expected to increase by 2.0 to 3.0 percent overall this year.
Marketbasket Survey specifics:
In KFB’s first quarter Marketbasket Survey, the overall trend of decreasing prices was heavily led by dairy products. Of the survey’s six food groups – beef, pork, poultry, dairy, grains, and fruits and vegetables – five categories reported reductions in average price, but dairy showed the greatest total reduction in cost with an average price drop of 7.8 percent (-$2.07). Beef, the only category with an average price continuing to climb this quarter, reached a new all-time high in the Marketbasket Survey’s history ($37.50 for five beef items). Overall, 26 of the 40 items recorded in this survey experienced decreases in average price during the first quarter.
The Marketbasket Survey’s top three average price decreases reported for items in the first quarter of 2015 were:
ITEM DEC 2014 MAR 2015 PRICE DECREASE
2% Milk $3.62 / gal. $3.15 / gal. -$0.47 / gal.
-13.0%Ice Cream $3.97 / 1/2-gal. $3.51 / 1/2-gal. -$0.46 / 1/2-gal.
-11.6%Whole Milk $3.65 / gal. $3.26 / gal. -$0.39 / gal.
-10.7%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 10 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 16 cents per dollar spent on food, down significantly from the 31 cents earned in 1980.
Kentucky Farm Bureau Federation has conducted its regional Marketbasket Survey over the past four decades as a tool to reflect local retail food pricing trends and their relationship to what farmers receive for their raw commodities. Cities reporting on the Kentucky Farm Bureau Marketbasket Survey for the first quarter of 2015 include: Alexandria, Augusta, Barbourville, Bardstown, Berea, Bowling Green, Brownsville, Clinton, Cold Springs, Cynthiana, Eddyville, Elkton, Glasgow, Grayson, Harrodsburg, Hartford, Hopkinsville, Lexington, Liberty, Louisa, Madisonville, Mayfield, McKee, Mt. Olivet, Munfordville, Murray, Owensboro, Owenton, Owingsville, Powderly, Richmond, Russellville, Salyersville, Somerset, South Shore, Stanford, Tollesboro and Walton.
Tagged Post Topics Include: Consumer Price Index, Decline, ERS, Food Dollar Series, Food Prices, Marketbasket Survey, USDA