Farm Bureau's market basket should be rebalanced

The price trends of Farm Bureau's "market basket" of food items are reported below. What strikes me is that potatoes are the only produce commodity tracked among the 16 items. Throw a little broccoli or apples in with the flour, white bread, cheese and bacon.


Retail food prices at the supermarket increased in the first quarter of 2008, according to the latest American Farm Bureau Federation Marketbasket Survey. The informal survey shows the total cost of 16 basic grocery items in the first quarter of 2008 was $45.03, up about 8 percent or $3.42 from the fourth quarter of 2007.
Of the 16 items surveyed, 11 increased, four decreased and one stayed the same in average price compared to the 2007 fourth-quarter survey. Compared to one year ago, the overall cost for the marketbasket items showed an increase of about 9 percent.
A 5-pound bag of flour showed the largest retail price increase, up 69 cents to $2.39.
Other items that increased in price were: cheddar cheese, up 61 cents to $4.71 per pound; corn oil, up 58 cents to $3.01 per 32-oz. bottle; a dozen large eggs, up 55 cents to $2.16; vegetable oil, up 38 cents to $2.63 per 32-oz. bottle; mayonnaise, up 22 cents to $3.14 for a 32-ounce jar; Russet potatoes, up 18 cents to $2.47 for a 5-pound bag; a 20-oz. loaf of white bread, up 16 cents to $1.78; apples, up 13 cents to $1.40 per pound; whole fryer chickens, up 9 cents to $1.37 per pound; and ground chuck, up 4 cents to $2.73 per pound.
Bacon was the only item in the survey that stayed the same in price, at $3.35 per pound.
Items that decreased in price were: whole milk, down 10 cents to $3.81 per gallon; pork chops, down 8 cents to $3.31 per pound; a 9-oz. box of toasted oat cereal, down 8 cents to $2.97; and sirloin tip roast, down 5 cents to $3.80 per pound. “More than a third of the increased cost reported this quarter is attributed to the two oil products and mayonnaise, which is oil-based. As expected, the drop in price for vegetable and corn oil observed in the last quarter of 2007 appears to have been temporary,” said Jim Sartwelle, an AFBF economist. “Continued strength in the wheat and cheese markets also contributed to the overall price increase for the basket of items.”
In addition, “It is important to note the contribution of runaway energy prices to the retail cost of food,” Sartwelle said. “Transportation, processing, and packaging all cost significantly more now than in prior years.”
As retail grocery prices have increased gradually, the share of the average food dollar that America’s farm and ranch families receive has dropped over time.
“In the mid-1970s, farmers received about one-third of consumer retail food expenditures on average. That figure has decreased steadily over time and is now just 22 percent, according to Agriculture Department statistics,” Sartwelle said. Using that percentage across-the-board, the farmer’s share of this quarter’s $45.03 marketbasket total would be $9.90.