000323 Marketbasket Prices Increase During First Quarter

Park Ridge, IL - Prices in supermarkets across America inched up slightly during the first quarter of 2000, according to the American Farm Bureau Federation's Marketbasket Survey. The latest informal national survey shows a 27-cent increase in selected grocery items from last year's fourth quarter.

Americans paid $33.49 for 16 selected items during the first quarter of this year, the highest average recorded since the survey's inception in 1989. The 27- cent hike from last quarter's $33.22 average also marked the third consecutive quarter where the average price slightly increased.

AFBF, the nation's largest and most influential farm organization with nearly 5 million members, conducts its informal quarterly Marketbasket Survey to help track retail food prices to ensure they are in line with prices received by the nation's farmers and ranchers. While grocery prices have increased during the past three quarters, the farmers' and ranchers' share has remained steady and low. The farm value of each food dollar spent in the United States is approximately 21 cents. Labor, at 38.5 cents, is the largest component of the consumers' food dollar.

A pound of bacon was the biggest contributor to the increase in the overall Marketbasket average, increasing 27 cents to $2.56. A five-pound bag of flour also experienced a sharp increase, 16 cents to $1.39.

“There is a bacon shortage,” said Joe Miller, an AFBF economist explaining the jump in bacon prices. “There has been a shortage over the past several months. More bacon is being used in the fast-food industry, on hamburgers and other sandwiches. This increase in usage has taken the supply to extremely low levels. And, in turn, the price of bacon has gone up.”

Of the 16 items on the survey, seven increased. Increases included eggs, $1.07 a dozen, up 11 cents; cereal, $2.99 per 10-ounce box, up 5 cents; potatoes, $1.69 per five-pound bag, up 4 cents; vegetable oil, $2.21 per 32- ounce jar, up 4 cents; and corn oil, $2.46 per 32-ounce bottle, up 1 cent.

A gallon of whole milk dropped 14 cents to $2.79, the largest decline on the survey. The drop in milk prices at the retail level is a reaction to the low farm-gate prices for milk that have seen dramatic declines during the past six months.

“The 14-cent drop would represent a little bit of a catchup of retail prices to farm prices,” said Dr. Ken Olson, a dairy specialist with AFBF. “And production was fairly strong this past year. Consumption was good, but production was even stronger. Consequently, farm prices have fallen dramatically since last fall.”

Other items that fell in price were white bread, $1.13 per 20-ounce loaf, down 8 cents; pork chops, $2.83 per pound, down 8 cents; cheddar cheese, $3.17 per pound, down 5 cents; mayonnaise, $2.85 per 32-ounce jar, down 3 cents; ground chuck, $1.83 per pound, down 1 cent; and sirloin tip roast, $2.59 per pound, down 1 cent.

The price of a pound of whole fryers, at $1, and a pound of apples, at 93 cents, remained unchanged from the last quarter.

Volunteer shoppers from 28 states participated in this latest survey, conducted in mid-February. The average price of this quarter is only $4.99 higher than the $28.50 average price of the inaugural survey in 1989.

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