Meat Industry INSIGHTS Newsletter

971021 Third-Quarter Prices Climb, According to Farm Bureau Survey

October 6, 1997

PARK RIDGE, I11 - Shoppers at America's supermarkets may have noticed slightly higher prices on certain items during the third quarter of 1997, according to the American Farm Bureau Federation's Marketbasket Survey. The latest survey shows an overall 28-cent increase since last quarter.

Americans paid $32.92 for the 16 select items during the period, marking the highest average since the survey's inception in 1989. It also marks the third straight quarter the average price increased.

"Many of the increases (this quarter) could reflect Labor Day demand," said David Miller, policy specialist with the American Farm Bureau Federation. "Labor Day marks a transition. It affects the dairy market. It can also affect the beef market. Also, because of the end of the garden season, more consumer demand is returned to the stores."

Prices tend to increase during the year's third quarter. Since 1989, prices during that period have jumped an average of 15 cents.

Potatoes contributed the most to the 28-cent increase in the overall average. A five-pound bag increased 31 cents to $1.77. Miller said the sharp increase could represent an adjustment from last year's dismal potato market. "This price may reflect an old crop, new crop adjustment," said Miller. "Last year's potato prices were very depressed. Potatoes weren't bringing in two cents a pound. They were rotting in storage."

Bacon and ground beef also saw increases. A pound of bacon jumped 12 cents to $2.48. Ground beef, at $1.75 a pound, climbed 1O cents.

"I don't know why ground beef would go up," said Miller. "It could be an internal adjustment of one cut (of meat) versus another cut. Cattle prices in general have been steady."

Of the 16 items on the survey, 10 went up in price. Whole fryers went up 6 cents to $1.00. Other increases included corn oil, $2.45 per 32-ounce jar, up 4 cents; bread, $1.16 per 20 ounce loaf, up 3 cents; eggs, 99 cents per dozen, up 3 cents; mayonnaise, $2.63 per 32-ounce jar, up 2 cents; pork chops, $3.32 per pound, up 1 cent; and cereal, $2.71 per 20-ounce box, up 1 cent.

A pound of sirloin tip fell 13 cents to $2.74, the largest decline on the survey. Other items dropping in price were cheddar cheese, $3.03 a pound, down 12 cents; apples, 91 cents a pound, down 9 cents; whole milk, $2.40 per gallon, down 6 cents; flour, $1.41 for a 5-pound bag, down 2 cents; and vegetable oil, $2.18 per 32-ounce jar, down 1 cent.

AFBF, the nation's largest general farm organization with more than 4.7 million members, conducts its informal quarterly Marketbasket Survey to help track retail food prices to ensure they are in line with prices received by the nation's farmers and ranchers. While some grocery prices have increased throughout the year, the farmers' share remains fairly steady. The farm value of each food dollar spent in the United States is approximately 23 cents. Labor, at 36 cents, is the largest component of the consumers' food dollar.

Volunteer shoppers from 37 states participated in this latest survey in mid-September.

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