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September 26, 2011


For more information: Isabella Chism, 317-692-7803
Kathleen Dutro, 317-692-7824, kdutro@infarmbureau.org 


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Grocery prices rise for 4th straight quarter

   Strong global demand, especially for meats and other protein-rich foods, was a primary driver behind higher retail prices at the supermarket during the third quarter of 2011, according to the latest grocery price survey from Farm Bureau.

   Indiana Farm Bureau's latest "market basket" survey, an informal survey of grocery prices released every quarter, shows that 16 food items on the survey cost an average of $50.33, up $1.39 from the second quarter of 2011. Of those 16 items, 11 increased and five decreased in average price compared to the prior quarter.

   The IFB survey is part of a nationwide survey compiled by the American Farm Bureau Federation from data supplied by state Farm Bureaus. The national survey reported similar results, showing a total average price of $53.12, up $1.95 from the previous quarter.

   "Global demand for meat and dairy products remains strong and continues to influence retail prices here in the U.S.," said AFBF economist John Anderson. "Many nations around the world rely on America to provide the food they need to improve their standard of living, particularly through the addition of protein to the diet. Strengthened demand for meats began in 2009, continued through 2010 and remains important as we look ahead to the close of 2011."

   Other factors also came into play, noted Anderson and Isabella Chism, IFB second vice president.

   "Farmers continue to pay higher costs for fuel, fertilizer and feed for their livestock, but those costs aren't passed along to consumers," said Chism, who farms in Howard County with her husband, Kent. "It's after the food leaves the farm that costs for transportation, processing, packaging, storage and marketing are added – and those costs continue to rise," she said.

   "As long as these costs remain elevated, consumers will continue to feel it in the form of higher food prices at the supermarket," Anderson explained.

   Meat and dairy products generally showed increases, with some exceptions. Shredded cheddar cheese rose by 20 cents to $4.24/pound; whole milk rose by 13 cents to $3.40/gallon; sirloin tip roast rose by 10 cents to $4.02/pound; and sliced deli ham rose by 3 cents to $5.26/pound.

   But the increases in meat and dairy products weren't universal. Bacon dropped by 24 cents to $3.92/pound, boneless chicken breasts dropped by 21 cents to $3.15/pound, ground chuck was down by 8 cents to $2.97/pound, and eggs were down 3 cents to $1.58/dozen. Apples, which rose by 50 cents to $2.08 per pound, and potatoes, up 45 cents to $3.59 for a 5-pound bag, accounted for the two largest individual increases. Bagged salad mix also dropped significantly, decreasing by 41 cents to $1.88 for a 1-pound bag.

   Other items that increased in price compared to the second quarter were flour, up 30 cents to $2.71 for a 5-pound bag; vegetable oil, up 22 cents to $3.20 for a 32-ounce bottle; white bread, up 18 cents to $1.79 for a 20-ounce loaf; orange juice, up 15 cents to $3.30 for a half gallon; and cereal, up 10 cents to $3.24 per 10-ounce box.

   "At the beginning of 2011, a number of factors including growing demand pointed to continued increases in retail food prices, especially for meats. But there's always a lag time as farmers and ranchers increase the size of their herds to meet higher demand," Anderson explained. "Extreme weather conditions around the nation have further compounded the issue, diminishing production and further increasing costs."

   The year-to-year direction of the market basket survey tracks with the federal government's Consumer Price Index (http://www.bls.gov/cpi/) report for food at home. As retail grocery prices have increased gradually over time, the share of the average food dollar that America's farm and ranch families receive has dropped.

   "In the mid-1970s, farmers received about one-third of consumer retail food expenditures for food eaten at home and away from home, on average. Since then, that figure has decreased steadily and is now about 16 percent, according to the Agriculture Department's revised Food Dollar Series," Anderson said. USDA's new Food Dollar Series may be found online at www.ers.usda.gov/Data/FoodDollar/app/.

   AFBF, the nation's largest general farm organization, has been conducting the informal quarterly market basket survey of retail food price trends since 1989. A total of 85 shoppers in 32 states participated in the latest survey, which was conducted in August. In Indiana, 23 volunteer shoppers participated.

   According to USDA, Americans spend just under 10 percent of their disposable annual income on food, the lowest average of any country in the world.


Apples, 1 lb. $2.08
Potatoes, 5 lb. $3.59
Bagged salad mix, 1 lb. $1.88
Orange juice, 1/2 gal $3.30
Ground chuck, 1 lb. $2.97
Sirloin tip roast, 1 lb $4.02
Bacon, 1lb. $3.92
Sliced deli ham, 1 lb. $5.26
Boneless chicken breast, 1 lb. $3.15
Whole milk, 1 gal. $3.40
Shredded cheddar cheese, 1 lb. $4.24
Grade A large eggs, 1 doz. $1.58
Flour, 5 lb. $2.71
Vegetable oil, 32 oz. $3.20
Cereal, 10-oz. box $3.24
White bread, 20-oz. loaf $1.79
Total $50.33