Lower energy prices coupled with rebounding supplies of beef, eggs and dairy means lower food prices.
That was the finding of the Wisconsin Farm Bureau’s Marketbasket survey of 16 basic food items used to prepare one or more meals. The average cost of $49.70 in March was $3.67 (or 6.9 percent) less than the same survey conducted last fall. The survey items were also down $2.26 (or 4.3 percent) from one year ago.
Prices of 11 of the survey’s 16 items dropped in priced compared to the Wisconsin Farm Bureau’s surveys conducted in the spring and fall of 2015.
Eggs, beef, pork and dairy products were driving the survey’s lower average price.
“Overall, declining energy costs have had a calming influence on food prices the past couple of years,” said Casey Langan, Wisconsin Farm Bureau Federation’s spokesman. “Greater supplies of milk, pork, beef and eggs are also having a beneficial impact for grocery shoppers.”
“Last spring’s outbreak of Avian Influenza sent shock waves throughout the poultry industry and the price of eggs soared to historic levels,” Langan said. “As egg supplies have returned to normal levels, their 54 percent drop since last fall reflects a return to normalcy.”
One dozen large, Grade A eggs averaged $1.34 per dozen in March, compared to $2.94 last September.
“Unlike the poultry business, which can repopulate its flocks with a relatively quick turnaround, that’s not the case with beef cattle,” Langan said. “The beef industry is finally growing in size after a period of reduced supplies and historically high prices worldwide.”
“A prolonged drought in western and southern states took a toll on the size of the U.S. cattle herd, shrinking it to a size not seen in 60 years. This came as millions of consumers in China, India and Brazil were adding more protein to their diets, causing beef exports to rise,” Langan said.
“The two beef items on the survey, ground chuck and sirloin tip roast, both saw price decreases of 11.8 percent and 2.3 percent, respectively, since last fall,” Langan noted. “This price movement would signal that the export market for U.S. beef has softened and the sizes of both the cattle herd and beef supplies are growing.”
Strong supplies in the U.S. and abroad have also reduced pork prices. Since last fall, one pound of bacon dropped more than 7 percent (from $4.51 to $4.18 per pound) while one pound of sliced deli ham reduced more than 17 percent (from $5.36 to $4.44) in price.
An over-supply of milk globally has had a dampening effect on the price Wisconsin dairy farmers receive for their milk. The reduced price has been passed on to the consumer. Shredded mild cheddar cheese decreased by 8.8 percent (from $4.77 to $4.35 per pound) over the past year. Likewise, a gallon of whole milk dropped by 25 cents (from $3.51 to $3.26) or 7 percent during that time period.
Just three of this survey’s items have seen consecutive price increases since March and September of 2015: a box of Cheerios, one pound of boneless chicken breast and a one-half gallon of orange juice.
WISCONSIN SURVEY PRICE IS LESS THAN NATIONAL AVERAGE
Wisconsin’s $49.70 Marketbasket is $3.58 less than the American Farm Bureau Federation’s national survey of the same 16 food items. AFBF’s survey rang in at $53.28 (6.7 percent difference).
FARMER’S SHARE IS JUST $7.95
During 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. Using that percentage across the board, the farmer’s share of this quarter’s $49.70 grocery bill would be $7.95.
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 pricing 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 communities across Wisconsin in March.
The Marketbasket Survey is an informal measure of prices at grocery stores in Wisconsin. The prices reported reflect variations in communities and retailers. The prices reported are not validated by any outside source. Prices were collected for this survey in the communities of Algoma, Ashland, Belleville, Beloit, Burlington, Chilton, De Pere, Eau Claire, Edgerton, Manawa, Manitowoc, Marshfield, Medford, Menomonie, Mequon, New London, Paddock Lake, Platteville, Plover, Richland Center, Saukville, Shawano, Sparta, Thorp, Union Grove, Waterford, Watertown and West Bend.