Wisconsin Ag Connection - State Food Prices Continue to Show Steady Incline in 2008

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State Food Prices Continue to Show Steady Incline in 2008
Wisconsin Ag Connection - 04/21/2008

The high price of energy is continuing to have an impact on the cost of food in the grocery stores so far this year. The latest quarterly Market Basket survey conducted by the Wisconsin Farm Bureau Federation shows that the cost of 20 select food items in 26 communities averaged $53.27--$1.34 more than what they were in the fourth quarter of 2007, and $5.42 above year ago levels.

The cost of eggs saw the largest percentage increase of all items. A dozen large eggs increased 29-cents to $1.84 in the first quarter of 2008. The 18.6 percent increase reflects the impact of higher energy and feed costs.

"Eggs are perishable item with a short product cycle," explained Paul Ketring, director of communications for the Farm Bureau. "These factors make eggs very susceptible to sudden price changes as the price of key inputs, electricity and feed grain, go up."

The price of whole fryer chickens increased by a quarter to $1.73 per pound. The USDA Economic Research Service reports that higher feed and energy costs in 2007-08 have caused poultry prices to rise faster than normal, but prices should begin to moderate later this year as production costs stabilize at a new higher level. Meanwhile, chicken breasts decreased by 16-cents to $2.44 per pound. This drop brought them back in line with their prices in the first quarters of 2007 and 2006, $2.40 and $2.36 respectively.

Retail prices for tomatoes also increased in the first quarter of 2008 to $2.04 per pound, 23-cents more than the fourth quarter 2007 price of $1.81 and 52-cents more than the first quarter of 2007. Fresh tomatoes sold in Wisconsin are shipped from Florida or California which makes them vulnerable to increases in transportation costs.

And retail milk prices had stabilized in the fourth quarter of 2007 and that continued through the first quarter of 2008. In the first quarter of 2008, a gallon of whole milk cost an average $3.39 or a penny less than in the fourth quarter of 2007. Cheddar cheese increased 15-cents per pound and retail butter prices increased 11-cents per pound according to the survey.

Beef and pork both had mixed changes in retail prices. A pound of ground sirloin cost $3.46, a decrease of 8-cents from the fourth quarter of 2007. A pound of sirloin tip roast increased 17-cents to $3.71 per pound. Bacon and pork chops both increased 4-cents per pound to $4.52 and $3.29 per pound respectively. Bone-in ham cost 17-cents less per pound at $3.29.

Inventories of beef cattle are down nationwide, but Wisconsin's beef herd numbers remain stable. Wisconsin farmers added 5,000 beef cows to the overall herd size in 2007 while drought caused farmers in southern states to reduce their herds.

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