While some speculate that weather disasters devastating crops across the USA this summer will cause grocery store prices to rise, American Farm Bureau Federation’s (AFBF) senior economist Terry Francl says that won’t be the case.
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An analysis released by Agriculture Online quotes Francl as saying that although the major row crops like corn and soybeans will have lower yields, reduced production and higher prices, “their primary use is in the form of poultry and animal feed, which results in a lagged effect on consumer food prices.” He further states that in the short term, meat and poultry prices are under pressure due to large supplies, some of which occurred because of beef herd liquidation due to extremely poor pasture and forage conditions. “It will take anywhere from six to 12 months before producers’ reaction to the higher feed costs will be reflected in lower animal production and higher meat prices in the grocery store,” Francl claims.
According to the latest AFBF Marketbasket Survey, retail food prices at the supermarket continued to decline during the last quarter. The informal survey on the total cost of the 16 basic grocery items shows a 22-cent decrease from this year’s second quarter survey results. The US$34.98 average paid by volunteer shoppers for the 16 items also reflect a 72-cent decline from the 2001 third quarter results, Agriculture Online analysis notes.
Cheddar cheese saw the largest price cut: it dropped 21 cents to US$3.24 per pound. The price of pork chops fell 13 cents, down to US$3.02 a pound, followed closely by mayonnaise, which dropped 12 cents to US$2.94 per 32-ounce jar. After a 16-cent increase in the second quarter, all-purpose flour decreased 9 cents to US$1.45 per 5 lb. bag.
The price of ground chuck was up 12 cents to US$2.03/lb., eggs were up 8 cents to US$1.05 per dozen, the price of sirloin tip roast was up 7 cents to US$ 2.85 per pound and the price of whole milk was up 1 cent to US$2.75 per gallon.
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By GlobalDataThe survey notes also that Russet potatoes saw the largest increase in price, jumping 41 cents to US$2.63 per 5 lb. bag, marking the third increase for the Russet potatoes this year. The price increase is attributed to a 13% reduction in the potato crop between 2000 and 2001.
AFBF reports that America’s farmers and ranchers receive only 19 cents out of every dollar spent on food: “This is down from 31 cents in 1980. Using that across-the-board percentage, the farmers’ share of this quarter’s Marketbasket average total would be about US$6.65,” according to AFBF. According to Francl, 81% of the money that consumers pay for food, goes to processing, transportation, labour, energy, and wholesale and retail markup, “which greatly dilutes the impact of on-the-farm price changes and, unfortunately, delays the price signals between consumers and farm producers.
By Aaron Priel, just-food.com correspondent
