Food Prices Going Down
Food Prices Going Down. I’m Greg Martin with today’s Line On Agriculture.
On a recent trip to the grocery store my wife and I commented how it seemed that we were getting a bit more for our money. We could at least fill a couple of bags for $50. According to the latest American Farm Bureau Marketbasket survey, most items in the grocery cart continue to drop. Jim Sartwelle, economist with the American Farm Bureau Federation, explains.
SARTWELLE: For the third consecutive quarter we saw a decrease in price of our 16 staple grocery items. It dropped about 2 percent from the first quarter of 2009 checking in right at $46.29.
Items that take the least amount of processing from the farm to the fork like fresh produce showed the largest decrease.
SARTWELLE: As we look across our Marketbasket meat, milk and egg items were the ones that decreased the most both year-to-year and from the first to the second quarter.
The Marketbasket survey showed a 6 percent annual decrease. Sartwelle says it’s significant because this is the third consecutive quarter with falling prices.
SARTWELLE: When we look back over the 20-plus-year history of the Marketbasket we had not seen a year like we had seen from the middle of 2007 to the middle of 2008. It’s pretty significant. It’s in line with the federal government has shown, four consecutive months of price decreases for food and lines up right along with what many of our state farm bureaus have shown in their own independent Marketbasket work.
Sartwelle explains what the decreases mean for producers.
SARTWELLE: It’s not really good news for producers. The percentage of the retail food dollar that farmers got 25 years ago was about a third, now it is less than 20 percent so as we see these price moves go down at the retail level we know that receipts back to farmers are going down.
With a couple of decrease in prices under the belt Sartwelle makes predictions about the third quarter.
SARTWELLE: When we look at the meat, milk and egg complex there is nothing on the horizon to indicate that we are going to see a big increase in prices. As we look at more highly processed items an increase upward in energy prices will moderate price decreases.
That’s today’s Line On Agriculture. I’m Greg Martin on the Northwest Ag Information Network.