Source:  Janie Gabbett, MEATINGPLACE.COM, 1/8/09


Retail food prices at the supermarket decreased slightly in the fourth quarter of 2008, in part due to declining meat prices, according to the latest American Farm Bureau Federation Marketbasket Survey.

The informal survey shows the total cost of 16 basic grocery items was $48.19, down about 1 percent, or 49 cents, from the third quarter of 2008. Of the 16 items surveyed, 11 decreased and five increased in average price compared to the third-quarter survey.

"Reversing an upward trend over the prior three quarters, ground chuck and sirloin tip roast prices decreased during the fourth quarter," noted AFBF economist Jim Sartwelle. "These downward moves, along with the decrease in prices of our pork items, reflect weakened retail demand for these meats during the end-of-year holidays."

Ground chuck prices moved down 9 cents to $2.86 per pound while sirloin tip roast was down 4 cents to $3.94 per pound. Pork chops were down 4 cents to $3.58 per pound and bacon decreased by 14 cents per pound to $3.37, according to the survey.

Other food items that showed price declines included: apples, flour, cheddar cheese, milk, corn oil, vegetable oil and potatoes.

Don't pop the champagne yet

Despite the decline, consumers are not likely to be dancing with joy in the aisles of their local grocery stores in the near future.

"Despite the recent collapse in oil prices and steep declines in farm commodity prices, food prices have not yet declined significantly and may not for quite some time," said Sartwelle. "Sticky prices, once a somewhat obscure economic concept to most food consumers, are the new reality as we move into 2009."

However, if the new year brings lower global demand for U.S. commodities as the world economic turmoil continues, retail food prices may moderate somewhat, Sartwelle added.

According to the survey, prices increased during the quarter for whole chicken fryers, mayonnaise, white bread, toasted oat cereal and large eggs.

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