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US retail food prices rose just under 2% in the first quarter of 2005, according the latest American Farm Bureau Federation marketbasket survey.

The total cost of 16 basic grocery items in the 2005 first quarter was $39.53, an increase of 66 cents from the 2004 fourth quarter survey.

Although the survey showed food prices up from the fourth quarter, they are down slightly from a year ago and almost exactly the average of the proceeding four quarters in 2004. “This suggests that the somewhat volatile situation of the past year may be stabilizing,” said AFBF senior economist Terry Francl. “Not only were agricultural commodities subject to some fairly wide price swings due to supply and demand conditions in 2004, but higher energy prices added to transportation and processing in the farm-to-retail price spread.”

Despite the slight increase in average prices found by AFBF, Americans spend just 10% of their disposable income on food annually, the lowest average of any country in the world.

Of the 16 items surveyed, 12 increased and four decreased in average price compared to the 2004 fourth quarter survey.

Flour showed the largest increase, up 22 cents per 5-pound bag to $1.68, followed by bacon, which rose 14 cents per pound to $3.25. Eggs and apples rose 9 cents to $1.08 per dozen and $1.13 per pound, respectively.

“Meat and dairy products were just slightly higher in the first quarter, reflecting an ongoing tight supply and demand situation,” said Francl. Improved exports for broilers and processed poultry parts as well as a slightly earlier than usual Easter season – which always prompts egg demand – played a role in the increased prices for whole fryers and eggs, he said.

Despite steady increases in grocery store average prices over time, the share of the average food dollar received by America’s farm and ranch families has actually dropped. “This reflects a long-standing trend,” said Francl. “Thirty years ago farmers received about one-third of consumer retail food expenditures. Now it is only about 22%, according to agriculture department statistics.”

Using that across-the-board percentage, the farmer’s share of this quarter’s marketbasket average total would be $8.70.

AFBF, the US’s largest general farm organization, conducts its informal quarterly marketbasket survey as a tool to reflect retail food price trends. A total of 84 volunteer shoppers in 19 states participated in this latest survey, conducted during the last week of February and first week of March.