New high reached in Marketbasket Survey as Kentucky’s retail food prices increase 2.2 percent during second quarter


Louisville, KY (July 5, 2011) – The latest Marketbasket Survey, conducted by the Kentucky Farm Bureau Federation in June 2011, indicates that average retail food prices in supermarkets across the state increased 2.2 percent during the second quarter of the year. This increase in price tally establishes a new high for the four-decade-old survey.

According to the survey results, the total cost of 40 basic grocery items was $117.44. This new total reflects an increase of $2.50, or 2.2 percent, over the same list of items reported in the first quarter of 2011. The second quarter 2011 Marketbasket total is also $8.96, or 8.3 percent, higher than the same reporting period in 2010, and $15.18, or 14.8 percent, higher than the second quarter of 2009.

Twenty-eight of the 40 items on the survey experienced increases in average price, one remained unchanged (1-lb. loaf of white bread), and just 11 items decreased.

Of the six food groups recorded in the survey – beef, dairy, fruits and vegetables, grain, pork, and poultry – the pork category showed the greatest total increase with an average price jump of 7.5 percent. Sliced bacon made the largest single-item increase with an average price jump of $0.62 per pound. The largest single-item decrease was for tomatoes, dropping an average of $0.67 per pound in price.

The Marketbasket survey’s top five average price increases reported for items in the second quarter of 2011 were:
Sliced Bacon $3.71 / lb. $4.33 / lb. +$0.62 / lb.
Whole Smoked Ham $2.64 / lb. $3.13 / lb. +$0.49 / lb.
Idaho Potatoes $4.04 / 10 lbs. $4.44 / 10 lbs. +$0.40 / 10 lbs.
Whole Fryers $1.18 / lb. $1.56 / lb. +$0.38 / lb.
T-Bone Steak $9.14 / lb. $9.48 / lb. +$0.34 / lb.

The Marketbasket survey’s top five average price decreases reported for items in the second quarter of 2011 were:
Tomatoes $2.39 / lb. $1.72 / lb. -$0.67 / lb.
Bell Peppers $1.52 / each $1.03 / each -$0.49 / each
Potato Chips $2.84 / 8 oz. twin $2.47 / 8 oz. twin -$0.37 / 8 oz. twin
American Cheese $3.33 / 24 slices $3.05 / 24 slices -$0.28 / 24 slices
Lettuce $1.72 / head $1.46 / head -$0.26 / lb.

Kentucky is far from alone in these retail food price changes. Based on the U.S. Department of Labor’s Bureau of Labor Statistics’ most recent Consumer Price Index data released in mid-June (which reflects figures through May 2011), food prices at the national level have increased by 3.5 percent during the last 12 months.

Though food prices have a myriad of market factors that impact total retail pricing, many of today’s noticeable price boosts can be directly linked to the necessary role that energy and transportation have in food production – and their associated changes in cost, too. The Bureau of Labor Statistics reports that energy costs jumped 21.8 percent over the last 12 months and gasoline prices surged by 23.7 percent during the last six months.

“The effects of continued raw energy cost increases are reverberating throughout the food industry and consumers are bearing the brunt of it,” said American Farm Bureau Federation Economist, John Anderson. “After food leaves the farm, costs for transportation, marketing, processing and storage come into play. As energy prices continue to run up, shoppers are feeling the pinch at the supermarket.”

Despite the recent rise in retail food prices experienced nationwide, Americans continue to enjoy some of the lowest food prices in the world and spend only about 10 percent of their disposable income on food each year. U.S. food costs remain far lower than that of other countries thanks in large part to agricultural efficiencies utilized in America. Putting those efficiencies to use currently allows the average U.S. farmer to produce enough food and fiber to provide for about 155 people. In 1980 each farmer only produced enough food and fiber for 115 people, and that output drops to just 19 people when looking back to 1940.

Yet while more food is now being produced on less land, the farmer’s share of the retail food dollar in America is down. According to the U.S. Department of Agriculture’s new Food Dollar Series, a farmer earns less than 16 cents per dollar spent on food, down significantly from the 31 cents earned as recently as 1980.

Kentucky Farm Bureau Federation has conducted its regional Marketbasket survey for four decades as a tool to reflect local retail food pricing trends and their relationship to what farmers receive for their raw commodities. Cities reporting on the Kentucky Farm Bureau Marketbasket Survey for the second quarter of 2011 include: Augusta, Bardstown, Bowling Green, Brandenburg, Brownsville, Campbellsville, Eddyville, Elkton, Glasgow, Harrodsburg, Hillview, Hodgenville, Hopkinsville, Jackson, Lexington, Madisonville, Marion, Maysville, Nancy, Owensboro, Richmond, Russellville and Shelbyville.

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