Kentucky’s retail food prices still on the rise in fourth quarter of 2014

Posted on Jan 19, 2015
Louisville, KY (January 19, 2015) – Retail food prices across the Commonwealth continued their year-long pattern of growth in the fourth quarter of 2014 according to the Kentucky Farm Bureau (KFB) Federation’s latest Marketbasket Survey. The December 2014 survey results identified the total cost of 40 basic grocery items as $129.14, or 1.7 percent higher than the previous quarter. This is the seventh consecutive quarter that the Marketbasket Survey total resulted in an increase and is also a new all-time high.

Since 2007, the Marketbasket Survey total has reported Kentucky’s retail food prices increasing by an average of 3.2 percent each year.

National food prices, according to the U.S. Department of Labor’s Bureau of Labor Statistics’ most recent Consumer Price Index (CPI) data, revealed that food-at-home prices grew by 0.3 percent in the last reported month (December 2014). Overall, the CPI data shows that national prices for food-at-home increased by an overall total of 3.4 percent over the past 12 months. This growth eclipsed the USDA’s anticipated 2.25 to 3.25 percent increase for 2014.

Looking ahead to 2015, the USDA’s Economic Research Service (ERS) predicts a steadying effect on food prices for the next 12 months (based on the assumption of normal weather conditions during the year). 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:

Of the six food groups recorded in the most recent survey – beef, pork, poultry, dairy, grains, and fruits and vegetables – the poultry category showed the largest total gain with an average price jump of 11.2 percent (+$1.08). Dairy was not far behind with an average increase of 7.1 percent (+$1.75). Both categories are now at all-time highs in the Marketbasket Survey’s history. Overall, 27 of the 40 items recorded in this survey experienced increases in average price during the fourth quarter.

The Marketbasket Survey’s top three average price increases reported for items in the fourth quarter of 2014 were:

 

ITEM SEP 2014 DEC 2014 PRICE INCREASE
Vanilla Ice Cream $3.09/1/2 gal. $3.97/ 1/2 gal. +$0.88/ 1/2 gal. +28.5%
Tomatoes $1.47/lb. $1.94/lb. +$0.47/lb. +32.0%
Whole Wheat Bread Loaf $1.92/lb. $2.34/lb +$0.42/lb. +21.9%
 

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.

Survey Origins:

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 2014 include: Alexandria, Augusta, Barbourville, Brandenburg, Brownsville, Eddyville, Elkton, Flatwoods, Georgetown, Glasgow, Harrodsburg, Hartford, Hickman, Hopkinsville, Irvine, Lawrenceburg, Louisa, Maysville, Munfordville, Owensboro, Owingsville, Powderly, Richmond, Russellville, Salyersville, Scottsville, Shelbyville, Smithland, Stanford, Tollesboro and Walton.

Tagged Post Topics Include: Alexandria, Augusta, Barbourville, Brandenburg, Brownsville, Consumer Price Index, Department of Labor, Economic Research Service, Eddyville, Elkton, Food Dollar Series, Georgetown, Glasgow, Harrodsburg, Hartford, Hickman, Hopkinsville, Irvine, Lawrenceburg, Louisa, Marketbasket Survey, Maysville, Munfordville, Owensboro, Owingsville, Powderly, RIchmond, Russellville, Salyersville, Scottsville, Shelbyville, Smithland, Stanford, Tollesboro, USDA, Walton