Retail food prices drop slightly

by Editor
Friday, January 09, 2009

Retail food prices at the supermarket decreased slightly in the fourth quarter of 2008, partly due to declining meat prices, according to the latest American Farm Bureau Federation Survey.

The informal survey shows the total cost of 16 basic grocery items in the fourth quarter of 2008 was $48.19, down about 1 percent or 49 cents from the third quarter of 2008. Of the 16 items surveyed, 11 decreased and five increased in average price compared to the 2008 third-quarter survey.

AFBF economist Jim Sartwelle said, that reversing an upward trend over the prior three quarters, ground chuck and sirloin tip roast prices decreased during the fourth quarter. These downward moves, along with the decrease in prices of our pork items, reflected weakened retail demand for these meats during the end-of-year holidays, said Sartwelle.

Despite the recent collapse in oil prices and steep declines in farm commodity prices, food prices had not yet declined significantly and may not for quite some time, said Sartwelle.

However, if the new year brings lower global demand for U.S. commodities as the world economic turmoil continues, retail food prices may moderate somewhat, according to Sartwelle.

AFBF, the nation’s largest general farm organisation, conducts its informal quarterly marketbasket survey as a tool to reflect retail food price trends. According to USDA statistics, Americans spend just under 10 percent of their disposable income on food annually, the lowest average of any country in the world.