Wisconsin Ag Connection - WFBF: Retail Food Prices Jump Five Percent in 2nd Quarter

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WFBF: Retail Food Prices Jump Five Percent in 2nd Quarter
Wisconsin Ag Connection - 07/03/2007

Higher gas prices, dry weather in parts of the United States, strong consumer demand and higher feed prices are behind a five percent increase in Wisconsin retail food prices in the second quarter of the year. That's according to the Wisconsin Farm Bureau Federation's Market Basket survey, which showed that the average cost of 20 selected food items in 26 communities was $50.33--up $2.48 compared to the first quarter of 2007.

The Farm Bureau said higher energy prices are having the biggest effect on food prices, increasing the cost of everything from food processing, packaging and transportation. Strong demand for dairy products and a persistent drought in the Southeast are also contributing to higher dairy and vegetable prices.

"It's rare that you have so many of these factors coming together at once to affect food prices," said Farm Bureau Spokesperson Tom Thieding. "With all of these factors combined, we are seeing some of largest increases in food prices since we started collecting data 15 years ago."

The survey showed that the cost of tomatoes increased 12 cents a pound to $1.63, and a ten pound bag of Wisconsin potatoes increased nine cents to $3.12. All meat items in the survey increased in price in the second quarter. Sirloin tip roast was up 25 cents a pound at $3.79; ground sirloin was up 11 cents a pound at $3.34; sliced bacon was up 40 cents a pound to $3.87; pork chops were 24 cents a pound more at $3.21; and whole chicken was 32 cents a pound more.

A dozen eggs were down four cents after increasing by a nickel cents in the first quarter. Red delicious apples dropped four cents a pound.

Thieding says debunking the myth that expanded ethanol production is the main cause of higher food prices is important.

"A study done by John Urbanchuk of LECG, LLC, proves that rising energy prices had a more significant impact on food prices than did corn," Thieding noted. "The study showed that a 33 percent increase in crude oil prices - the equivalent of $1.00 per gallon over current levels of retail gasoline prices--would increase retail food prices measured two to three times the impact than corn prices would have."

Communities surveyed include Appleton, Ashland, Eau Claire, Fond du Lac, Grafton, Green Bay, Janesville, La Crosse, Ladysmith, Lancaster, Madison, Manitowoc, Marshfield, Medford, Mequon, Milwaukee, Oshkosh, Portage, Racine, Shawano, Sheboygan, Stevens Point, Watertown, Waukesha, Wausau and West Bend.