LOUISVILLE, Ky. (Jan. 21, 2014) – The latest Marketbasket Survey, conducted by the Kentucky Farm Bureau (KFB) Federation in December 2013, indicates that average retail food prices in supermarkets across the state increased just slightly in the fourth quarter of 2013, but, as a result, concluded the year with the highest prices in the survey’s history.
According to the survey findings, the total cost of 40 basic grocery items was $120.08. These results were $0.93, or 0.8 percent, higher than the same list of items reported in the third quarter of 2013, the previous record high.
The Marketbasket Survey total also reflects a 3.9 percent increase over the average price reported in the fourth quarter of 2012. This increase fits precisely within the anticipated three to four percent food price growth that American Farm Bureau Federation economists forecast at the beginning of 2013, and is just slightly higher than the average rate of inflation over the past 10 years.
Five years ago the average cost of the same 40 surveyed grocery items was $111.63, or 7.6 percent less than what these items cost on average today.
In further comparison to national food price trends, the U.S. Department of Labor’s Bureau of Labor Statistics’ most recent Consumer Price Index (CPI) data revealed that food-at-home prices remained steady in the last reported month (December 2013). Overall, the CPI data shows that national prices for food-at-home increased by an overall total of 0.4 percent over the past 12 months.
Of the six food groups recorded in the most recent survey – beef, pork, poultry, dairy, grains, and fruits and vegetables – the beef category showed the largest total increase with an average price jump of 9.7 percent (+$3.04).
The grains category made the greatest decrease in average price at -8.4 percent (-$1.25), and dairy registered no change in overall average price from the previous quarter.
Agricultural Economics in Food Prices: Whether or not grocery prices fluctuate from quarter to quarter, it remains a fact that Americans continue to enjoy some of the lowest food prices in the world. Shoppers in the U.S. spend only about 10 percent of their disposable income on food each year. Those costs remain far lower than any other country in the world thanks to many of the agricultural efficiencies utilized in America. Today the average U.S. farmer produces enough food and fiber to provide for about 154 people – a significant jump from an average of 19 people per farmer back in 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 Food Dollar Series, a farmer earns less than 16 cents per dollar spent on food, down significantly from the 31 cents earned in 1980.