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Americans’ hankering for bacon pushes retail price higher

Bacon is a sexy food item in restaurants and everywhere else, creating an inventory decline and thus a price increase.

Source: American Farm Bureau Federation
Higher retail prices for several foods, including bacon, chicken breast, orange juice, sliced deli ham and flour resulted in a slight increase in the American Farm Bureau Federation’s Fall Harvest Marketbasket Survey.

The informal survey shows the total cost of 16 food items that can be used to prepare one or more meals was $51.13, up $1.43, or about 3%, compared to a survey conducted a year ago. Of the 16 items surveyed, 12 increased and four decreased in average price.

Several foods showed significant retail price increases from a year ago, including bacon, chicken breast and orange juice, according to John Newton, AFBF’s director of market intelligence.

“Bacon was up significantly because of the lower inventory and higher prices of pork bellies. We saw a rally in wholesale bacon prices this summer and fall which is being reflected at the retail level,” Newton says. “Bacon is a sexy food item in restaurants and everywhere else, creating an inventory decline and thus a price increase.”
 
The following items showed retail price increases from a year ago.

• bacon, up 19% to $5.24 per pound
• chicken breast, up 9% to $3.13 per pound
• flour, up 7% to $2.37 per 5-pound bag
• orange juice, up 6% to $3.46 per half-gallon
• vegetable oil, up 5% to $2.52 for a 32-ounce bottle
• sliced deli ham, up 3% to $5.62 per pound
• sirloin tip roast, up 3% to $5.17 per pound
• whole milk, up 3% to $2.93 per gallon
• white bread, up 2% to $1.61 for a 20-ounce loaf
• toasted oat cereal, up 1% to $2.84 for a 9-ounce box
• shredded cheddar, up 1% to $4.11 per pound
• apples, up 1% to $1.61 per pound

These items showed moderate retail price decreases compared to a year ago.

• bagged salad, down 16% to $2.41 per pound
• ground chuck, down 3% to $3.99 per pound
• eggs, down 3% to $1.44 dozen per dozen
• potatoes, down 2% to $2.68 for a 5-pound bag

“Supply and demand for chicken breasts is tight, which is why retail prices are higher,” Newton says. In addition, he says the price increase for orange juice is related to the lower supply of oranges, which could worsen due to the impact of Hurricane Irma.

Consumers saw a slight decline in egg prices. “Egg supplies are fully rebuilt from what we saw a few years ago, and we see egg prices continue to come back to where they were prior to the bird flu a few years ago,” Newton says.

Price checks of alternative milk choices not included in the overall marketbasket survey average revealed the following: 1/2 gallon regular milk, $2.07 and 1/2 gallon organic milk, $4.27.

For many food items, the year-to-year direction of the marketbasket survey tracks with the federal government’s Consumer Price Index report for food at home. As retail grocery prices have increased gradually over time, the share of the average food dollar that America’s farm and ranch families receive has dropped.

“Through the mid-1970s, farmers received about one-third of consumer retail food expenditures for food eaten at home and away from home, on average. Since then, that figure has decreased steadily and is now about 15.6%, according to the Agriculture Department’s revised Food Dollar Series,” Newton says.

Using the “food at home and away from home” percentage across-the-board, the farmer’s share of this $51.13 marketbasket would be approximately $8.

AFBF, the nation’s largest general farm organization, began conducting informal quarterly marketbasket surveys of retail food price trends in 1989. The series includes a Spring Picnic survey, Summer Cookout survey, Fall Harvest survey and Thanksgiving survey.

According to USDA, Americans spend just under 10% of their disposable annual income on food, the lowest average of any country in the world. A total of 81 shoppers in 25 states participated in the latest survey, conducted in September.

TAGS: Farm Life
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