Second Quarter Food Prices Drop Nationwide
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July 15, 2004

Second Quarter Food Prices Drop Nationwide

The Marketbasket Survey, a quarterly nationwide survey of supermarket food prices, shows food prices dropped during the second quarter of 2004 compared to the prices recorded during the first quarter. The survey tests prices of 16 basic grocery items, and the total price for the same food items in the second quarter dropped $0.99.

“The national average for the 16 food items totaled $38.85,” said Diane Olson, director of promotion and education for the Missouri Farm Bureau. “In Missouri, the same 16 food items totaled $38.93, so we were right in line with the national average.”

Olson said careful shoppers found some real bargains at the grocery store compared to the prices paid during the first quarter of the year. “Whole chickens dropped in price from $1.35 to a dollar a pound, and Grade A large eggs averaged $0.82 a dozen during the second quarter compared to $1.35 a dozen during January through March.”

Other decreases nationwide include russet potatoes, down 26 cents for five pounds, ground chuck down 13 cents a pound and pork chops down 8 cents a pound. “While we saw second quarter prices drop from the first quarter survey, the 16 food items during this quarter were higher than the same quarter last year,” Olson said. “The 16 food items cost $38.93 in Missouri this year, compared to $31.54 for the same items during the same quarter in 2003.”

Much of the increased cost in food from the same time last year is attributed to fuel costs. “Sharply higher fuel prices means from the time the food leaves the farm until it reaches the grocery store, increased transportation costs are passed along,” Olson said. “Unfortunately, farmers cannot pass these increases along - they sell their commodities at market value, regardless of their input costs to produce those commodities.”

“On the average, farmers receive 19 cents of every food dollar consumers spend. So out of the $38.85 for the 16 food items in this survey, farmers would receive $7.38. Out of the $7.38,” Olson said, “farmers must pay significantly higher prices for diesel fuel, gasoline, fertilizer and petrochemicals.” Regardless of fluctuations, Olson said consumers still only spend about 10 percent of their disposable income for food in America, less than any other nation in the world.


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