Food prices at the grocery store continue to fall

Newton Independent

Prices at the grocery store fell for the fourth straight quarter and are now significantly lower than a year ago, according to the third quarter American Farm Bureau Marketbasket Survey.

The informal survey shows the total retail cost of 16 food items that can be used to prepare a meal was $46.03, down 26 cents from the second quarter and $4.18 lower than a year ago, a 10 percent drop.

While the news is good for families stretched thin by the on-going recession, the nation's livestock farmers face a different situation.

According to the Iowa Farm Bureau, livestock producers continue to experience losses due to historically high feed costs, depressed global demand for meat, eggs and milk and misinformation about the H1N1 influenza and its purported link to pork.

Over the past year, the Farm Bureau notes, hog farmers have lost about $20 per pig, beef producers have lost $120 per head and dairy farmers have lost $3 to $5 per hundredweight of milk.

"While the decline in global demand has helped bring down prices for shoppers, a combination of decreased demand and other factors has made things more difficult for farmers, particularly those who raise livestock," said Dave Miller, director of research and commodity services for Iowa Farm Bureau.

"Despite the tremendous efficiency of the American farmer, the profit margins in farming are narrow, and there is a relentless cost-price squeeze," Miller said. "Narrow margins and high efficiency are reflected in the farmer's small share of the food dollar, 19 cents. American farmers are doing their part in keeping food affordable for consumers. But those tight margins also mean that farmers and their families are more susceptible to downturn in demand, like we've seen as a result of the weak economy."

The marketbasket survey includes bagged salad, orange juice, apples, potatoes, chicken breasts, sliced deli ham, bacon, ground chuck, sirloin tip roast, eggs, milk, shredded cheddar cheese, bread, flour, toasted oat cereal and vegetable oil.

You can read the full report here.