Farmer receives only 15.6% of consumer retail food expenditures.

September 26, 2017

3 Min Read
Bacon, chicken retail prices higher

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 (AFBF) "Fall Harvest Marketbasket Survey."

The informal survey shows that the total cost of 16 food items that can be used to prepare one meal or more 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 Dr. John Newton, AFBF 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 said. “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/lb.

  • Chicken breast, up 9% to $3.13/lb.

  • Flour, up 7% to $2.37 per 5 lb. bag

  • Orange juice, up 6% to $3.46 per half-gallon.

  • Vegetable oil, up 5% to $2.52 for a 32 oz. bottle.

  • Sliced deli ham, up 3% to $5.62/lb.

  • Sirloin tip roast, up 3% to $5.17/lb.

  • Whole milk, up 3% to $2.93/gal.

  • White bread, up 2% to $1.61 for a 20 oz. loaf.

  • Toasted oat cereal, up 1% to $2.84 for a 9 oz. box.

  • Shredded cheddar cheese, up 1% to $4.11/lb.

  • Apples, up 1% to $1.61/lb.

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

  • Bagged salad, down 16% to $2.41/lb.

  • Ground chuck, down 3% to $3.99/lb.

  • Eggs, down 3% to $1.44/doz.

  • Potatoes, down 2% to $2.68 for a 5 lb. bag.

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

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

Price checks of alternative milk choices not included in the overall marketbasket survey average revealed the following prices for a half-gallon: $2.07 for regular milk, and $4.27 for organic milk.

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 consumed at home. AFBF said 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 (U.S. Department of Agriculture’s) revised 'Food Dollar Series',” Newton said.

Using the food consumed at home and away from home percentage across the board, the farmer’s share of this $51.13 marketbasket would be approximately $8.00.

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 annual disposable 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, which was conducted in September.

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