The American Farm Bureau Federations' Marketbasket Survey shows the total cost of 16 food items that can be used to prepare one or more meals was $53.12, up $1.95 or about 4% compared to the second quarter of 2011. Of the 16 items surveyed, 13 increased, two decreased and one remained the same in average price compared to the prior quarter.
AFBF Economist John Anderson says global demand for meat and dairy products remains strong and continues to influence retail prices here in the United States. On-farm production costs continue an upward trend but those costs are largely borne by farmers and ranchers. But, higher costs for transportation, marketing, processing and storage are paid for by the consumer. Anderson explains - as long as these costs remain elevated, consumers will continue to feel it in the form of higher food prices at the supermarket.
Meat and dairy products accounted for about 40% of the quarter-to-quarter retail price increase. Boneless chicken breasts increased 24 cents, bacon rose 23 cents, sliced deli ham was up 17 cents, shredded cheddar increased 14 cents a pound and whole milk was up 4 cents per gallon.
Other items that increased in price compared to the second quarter were Russet potatoes, Red Delicious apples, flour; vegetable oil, eggs, orange juice, bagged salad, and bread. Most items showing an increase in retail price from quarter-to-quarter also showed year-to-year increases.
The year-to-year direction of the Marketbasket Survey tracks with the federal government's Consumer Price Index 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. Using the "food at home and away from home" percentage across-the-board, the farmer's share of this quarter's $53.12 marketbasket would be $8.50.
According to USDA, Americans spend just under 10% of their disposable annual income on food, the lowest average of any country in the world.