Retail food prices at the supermarket increased modestly during the second quarter of 2012, according to the latest Wisconsin Farm Bureau Marketbasket Survey.
“Any impact on food prices from the drought currently gripping the Midwest will not likely be seen in the grocery aisles until next year,” said Casey Langan, Wisconsin Farm Bureau Federation spokesman.
“Energy prices have moderated in 2012. Consumers may be surprised that stable energy prices have a bigger impact on their grocery bill than drought. The price for crops like corn and soybeans represent just a portion of the overall retail food prices, most of which are the energy-intensive efforts of processing, manufacturing and transporting food. The bottom line is that the drought does not impact these costs.”
U.S. Agriculture Secretary Tom Vilsack recently acknowledged the financial strain from lower-than-expected crop yields that drought causes farmers. He said higher commodity prices should not impact consumers with higher food prices until 2013. Vilsack also noted that energy prices drive up food prices more significantly.
Farm Bureau’s informal survey shows the total cost of 16 food items that can be used to prepare one or more meals was $50.32, up 77 cents or about 1.6 percent compared to the first quarter of 2012. Of the 16 items surveyed, 10 increased in price and six items decreased in price compared to the prior quarter. The cost for the survey items increased over 1.7 percent compared to one year ago.
Items with increases in price of seven percent or more were sirloin tip roast (increased 51 cents or 12 percent to $4.75 per pound), all-purpose flour (increased 29 cents or 11.7 percent to $2.77 for five pounds) and vegetable oil (increased 25 cents or 8.4 percent to $3.21 for 32 ounces).
“This quarter’s uneventful survey prices confirm the theory that retail food prices are moderating in comparison to more volatile prices in 2009 and 2010,” said Langan.
Wisconsin’s $50.32 Marketbasket is 59 cents less than the American Farm Bureau Federation’s national survey of the same 16 food items. AFBF’s survey rang in at $50.91. Despite the lower overall price, eight of the 16 items recently surveyed in Wisconsin were higher than the national average: vegetable oil, flour, bacon, boneless chicken breast, sirloin tip roast, cheddar cheese, milk and orange juice.
Over the last three decades retail grocery prices have gradually increased while the share of the average dollar spent on food that farm families receive has dropped. In the mid-1970s, farmers received about one-third of consumer retail food expenditures in grocery stores and restaurants. Since then that figure has decreased steadily and is now about 16 percent, according to the U.S. Department of Agriculture’s revised Food Dollar Series. Using that percentage across the board, the farmer’s share of this quarter’s $50.32 grocery bill would be $8.05.
Despite higher prices, the USDA says Americans will still spend approximately 10 percent of their disposable annual income on food, the lowest average in the world.
The Marketbasket Survey is a quarterly look at the trends in food prices in Wisconsin in relation to changing farm prices, weather and wholesale and retail food marketing. Members of the Wisconsin Farm Bureau collected price samples of 16 basic food items in 25 communities across Wisconsin — including Lancaster, Richland Center and Hillsboro — in June.