Retail food prices at the supermarket decreased slightly for the third consecutive quarter, according to the latest American Farm Bureau Federation Marketbasket Survey. The informal survey shows the total cost of 16 food items that can be used to prepare a meal was $46.29, down about 2 percent or $1.12 from the first quarter of 2009. Of the 16 items surveyed, 10 decreased, five increased and one remained the same in average price compared to the prior quarter.

Russet potatoes, boneless chicken breasts, eggs, sliced deli ham and whole milk declined the most in price and together account for most of the decrease in average price of the overall marketbasket. Russet potatoes dropped 29 cents to $2.76 for a 5-pound bag; chicken breasts dropped 28 cents to $3.10 per pound; eggs decreased 16 cents to $1.34 per dozen; sliced deli ham and whole milk dropped 14 cents to $4.80 per pound and $3.01 per gallon, respectively.

Other items that decreased in price were: ground chuck, down 12 cents to $2.82 per pound; sirloin tip roast, down 11 cents to $3.88 per pound; flour, down 9 cents to $2.42 for a 5-pound bag; bacon, down 7 cents to $3.19 per pound; and toasted oat cereal, down 5 cents to $2.86 for a 9-oz. box.

“The quarter-to-quarter price decline reported by our volunteer shoppers indicates that consumers are seeing some relief at the grocery store. Even more significant is that average retail prices for eggs, milk, chicken breasts and bacon for the second quarter of 2009 are significantly lower than one year ago,” said AFBF Economist Jim Sartwelle.

Overall, the average price for the marketbasket of foods declined $3.10 or about 6 percent over a year’s time. Retail egg prices dropped 26 percent, milk decreased 22 percent, chicken declined 19 percent and bacon was 11 percent lower compared to a year ago.

“The foods that declined the most in retail price are among the least-processed items in our marketbasket. When wholesale prices paid to producers for minimally processed foods such as these decrease drastically, as has been the case over the past few months, consumers typically benefit fairly quickly from retail price reductions in the grocer’s case,” Sartwelle said.

Several items went up slightly in price compared to the prior quarter: bagged salad, up 13 cents to $2.75 for a 1-pound bag; shredded cheddar cheese, up 7 cents to $4.31 for one pound; apples, up 6 cents to $1.41 per pound; vegetable oil, up 6 cents to $2.85 for a 32-oz. bottle; and orange juice, up 2 cents to $3.02 for a half-gallon. A 20-oz. loaf of white bread remained the same in price, $1.77.

AFBF’s second quarter marketbasket survey tracks closely with the federal government’s May 2009 Consumer Price Index report for all food, which showed a slight decline (-0.2 percent) for the fourth consecutive month.

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.

“Starting in the mid-1970s, farmers received about one-third of consumer retail food expenditures for food eaten at home and away from home, on average. That figure has decreased steadily over time and is now just 19 percent, according to Agriculture Department statistics,” Sartwelle said.

Using the “food at home and away from home” percentage across-the-board, the farmer’s share of this quarter’s $46.29 marketbasket would be $8.80.

AFBF, the nation’s largest general farm organization, has been conducting the informal quarterly marketbasket survey of retail food price trends since 1989. The mix of foods in the marketbasket was updated during the first quarter of 2008.

According to USDA, Americans spend just under 10 percent of their disposable annual income on food, the lowest average of any country in the world. A total of 82 shoppers in 33 states participated in the latest survey, conducted in May. -30-

Tracking milk and egg trends

For the second quarter of 2009, shoppers reported the average price for a half-gallon of regular whole milk was $1.92, down 24 cents from the prior quarter. The average price for one gallon of regular whole milk was $3.01, down 14 cents. Comparing per-quart prices, the retail price for whole milk sold in gallon containers was about 25 percent lower compared to half-gallon containers, a typical volume discount long employed by retailers.

The average price for a half-gallon of rBST-free milk was $3.18, down 1 cent from the last quarter and about 65 percent higher than the reported retail price for a half-gallon of regular milk ($1.92).

The average price for a half-gallon of organic milk was $3.63, down 8 cents compared to the first quarter and approximately 90 percent higher than the reported retail price for a half-gallon of regular milk ($1.92).

Compared to a year ago (second quarter of 2008), the retail price for regular milk in gallon containers decreased by 22 percent while regular milk in half-gallon containers decreased 20 percent. The average retail price for rBST-free milk dropped about 5 percent in a year’s time. The average retail price for organic milk in half-gallon containers went up and down slightly throughout the year, rising 1 percent in the second quarter of 2009 compared to a year ago.

For the second quarter of 2009, the average price for one dozen regular eggs was $1.34. The average price for “cage-free” eggs was $3.00 per dozen, around 95 percent more per dozen than regular eggs.

Regular eggs and “cage-free” eggs dropped in retail price by 26 percent and 1.5 percent, respectively, between the second quarter of 2008 and the second quarter of 2009.