Kentucky’s retail food prices drop slightly in fourth quarter of 2012Posted on Jan 17, 2013
Louisville, KY (January 17, 2013) – The latest Marketbasket Survey, conducted by the Kentucky Farm Bureau Federation in December 2012, indicates that average retail food prices in supermarkets across the state fell slightly during the fourth quarter of the year. According to the survey, the total cost of 40 basic grocery items was $115.53. This total reflects a decrease of $0.38, or 0.3 percent, from the same list of items reported in the previous quarter.
The Marketbasket Survey’s newest total is additionally $0.37, or 0.3 percent, lower than the final quarter of 2011. Five years ago the average cost of the same 40 surveyed grocery items was $104.43. This chart illustrates the Marketbasket Survey’s quarter-by-quarter pricing totals trend from the previous five years.
Additionally, the average Marketbasket Survey total from all four quarters of 2012 was $115.05 – a decrease of $1.29, or 1.1 percent, from the previous year’s average total of $116.34. This chart illustrates the annual average price total trends over the previous five years.
Kentucky’s most recent retail food price results reflected slight decreases overall, but the American Farm Bureau Federation’s national Marketbasket Survey (which monitors the average price of 16 basic grocery items from states across the country) saw a larger drop in food costs. Its average total decreased by approximately 3.0 percent. On a larger scale, however, the U.S. Department of Labor’s Bureau of Labor Statistics’ Consumer Price Index data that was released yesterday (reflecting figures through December 2012), revealed that overall national food-at-home prices increased by 0.2 percent in the last reported month.
Looking at food prices over a larger sample of time, Kentucky retail food prices as recorded by the Marketbasket Survey are actually beating the national trend. According to the Consumer Price Index, the national average price for food at home has grown by a total of 1.3 percent over the past 12 months. Today’s Marketbasket Survey total reflects a 0.3 percent decrease over the previous 12 months.
Marketbasket Survey specifics:
Of the six food groups recorded in Kentucky Farm Bureau’s most recent survey – beef, dairy, fruits and vegetables, grain, pork, and poultry – the dairy category showed the greatest total decrease with an overall average price drop of 2.9 percent (-$0.66). The beef category made the largest (and only) average increase in price at 4.6 percent ($1.44). Half-gallon vanilla ice cream had the greatest single-item decrease with an average price drop of -$0.66, while the highest single-item increase was T-bone steak, climbing an average of $1.26 per pound. Overall, 23 of the 40 items in this survey experienced decreases in average price while 17 increased.
The Marketbasket Survey’s top five average price decreases reported for items in the fourth quarter of 2012 were:
ITEM SEP 2012 DEC 2012 PRICE DECREASE
Vanilla Ice Cream $3.59 / ½-gal. $2.93 / ½-gal. -$0.66 / ½-gal., -18.4%
Roll Sausage $5.43 / 2-lbs. $4.91 / 2-lbs. -$0.52 / 2-lbs., -9.6%
Idaho Potatoes $4.20 / 10-lbs. $3.75 / 10-lbs -$0.45 / 10-lbs., -10.7%
Sirloin Tip Roast $5.07 / lb. $4.75 / lb. -$0.32 / lb., -6.3%
Whole Fryers $1.45 / lb. $1.18 / lb. -$0.27 / lb., -18.6%
The Marketbasket Survey’s top five average price increases reported for items in the fourth quarter of 2012 were:
ITEM SEP 2012 DEC 2012 PRICE INCREASE
T-Bone Steak $9.35 / lb. $10.61 / lb. +$1.26 / lb., +13.5%
Rib-Eye Steak $9.79 / lb. $10.31 / lb. +$0.52 / lb., +5.3%
Cut Fryers $1.44 / lb. $1.71 / lb. +$0.27 / lb., +18.8%
Sliced Bacon $3.82 / lb. $4.04 / lb. +$0.22 / lb., +5.8%
2% Milk $3.08 / gal. $3.28 / gal. +$0.20 / gal., +6.5%
Tomatoes $1.54 / lb. $1.74 / lb. +$0.20 / lb., +13.0%
Agricultural Economics in Food Prices:
Looking ahead, the USDA Economic Research Service reports that despite last summer’s severe drought in the Midwest, overall retail food prices remained flat across the country. The drought did affect the price of corn, soybeans and other field crops, though, and is ultimately expected to drive up retail food prices in 2013. Consumers should be aware that higher field crop prices will not only impact grain-based products, but will also raise retail costs for beef, pork, poultry and dairy products as higher feed costs negatively impact meat product prices.
“Throughout 2012, food prices were relatively stable, thanks to very slow but steady growth in the general economy coupled with fairly stable energy prices,” said John Anderson, American Farm Bureau Federation’s deputy chief economist. “For this year, we expect food prices to rise by 3 to 4 percent, which is slightly higher than the average rate of inflation over the past 10 years.”
Even when grocery prices seem to fluctuate from quarter to quarter, 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 dramatic 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 U.S. Department of Agriculture’s new 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 fourth quarter of 2012 include: Alexandria, Ashland, Augusta, Bardstown, Brandenburg, Eddyville, Elizabethtown, Elkton, Glasgow, Grayson, Harrodsburg, Hartford, Hillview, Hopkinsville, Lawrenceburg, Lexington, Madisonville, Mayfield, Maysville, Munfordville, Nancy, Owensboro, Powderly, Russellville, Shelbyville and Walton.
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