Return to TFB Main Page
Return to Current Edition
Texas Agriculture Archive

January 20, 2006

Food prices dip slightly in fourth quarter

Retail prices for food at the supermarket dropped just over 3 percent in the fourth quarter of 2005, according to the latest American Farm Bureau Federation Marketbasket Survey. The informal survey shows the total cost of 16 basic grocery items in the 2005 fourth quarter was $38.83, a decrease of $1.13 from the 2005 third quarter survey average of $39.96. The cost of the marketbasket items was down 4 cents from a year ago.

Of the 16 items surveyed, nine decreased and seven increased in average price compared to the 2005 third quarter survey.

Corn oil showed the largest decrease, down 27 cents to $2.67 per 32-oz. bottle, followed by cheddar cheese, which dropped 26 cents down to $3.39 per pound, and mayonnaise, which dropped 25 cents to $3.06 per 32-oz. jar.

Other items that decreased in price: pork chops, down 24 cents per pound to $3.24; toasted oat cereal, down 17 cents per 10-oz. box to $2.87; ground chuck, down 14 cents to $2.54 per pound; flour, down 13 cents to $1.56 per 5-pound bag; vegetable oil, down 10 cents to $2.45 for a 32-oz. bottle; and apples, down 2 cents per pound to $1.07.

Items that increased in price from the third quarter of 2005 were: sirloin tip roast and bread, which each increased by 11 cents to $3.65 per pound and $1.40 per 20-oz. loaf, respectively; potatoes, which increased by 7 cents to $2.30 per 5-pound bag; whole chicken fryers and bacon, which each rose by 5 cents to $1.24 and $3.12 per pound, respectively; and eggs and milk, which each rose by 3 cents to $1.10 per dozen and $3.17 per gallon, respectively.

"Although there has been some small quarter-to-quarter variation, food prices as reported in the marketbasket survey have been stable for the past two years," said AFBF Senior Economist Terry Francl. "Perhaps more interesting is what has not happened over the past quarter," said Francl. "The sharp spike in energy prices in the third quarter of 2005 does not appear to have been transferred to the food sector at this time. While higher energy prices may yet work into food prices in the first half of 2006, it now appears that they will have only a small impact."

The share of the average food dollar that America's farm and ranch families receive has dropped over time, despite gradual increases in retail grocery prices. "Looking back 30 years, farmers received about one-third of consumer retail food expenditures. That figure has dropped steadily over time and is now just 22 percent, according to USDA statistics," Francl said.

Using that percentage across-the-board, the farmer's share of this quarter's $38.83 marketbasket total would be $8.54.

EPA funds lawsuits against itself

The Environmental Protection Agency (EPA) during the past decade has given grant money to 2,200 nonprofit environmental groups, and many of them have then turned around and filed lawsuits against the government agency, according to a San Francisco Chronicle article. A new EPA policy is supposed to help prevent groups receiving competitive grants of over $15,000 from using the money to lobby or litigate.

"It may be confusing to the public that with the right hand we're accepting government money and with the left hand sometimes we're beating up the government," Charles Miller, communications director for Environmental Defense, is quoted as saying.

Food labeling changes now in effect

Two major changes to food labeling went into effect Jan. 1. Trans fat (trans fatty acids) content has to be included on product nutrition facts panels, and labels have to identify if a food product contains any of eight major allergenic foods. Although effective Jan. 1, there will be a transition period before new labeling appears on products in grocery stores because of 2005 stock in warehouses.

The Food and Drug Administration explained the need for the new food labeling by noting that trans fat consumption can raise a person's LDL or "bad" cholesterol level and that 90 percent of all documented food allergic reactions result from the eight major food allergens—milk, eggs, fish, crustacean shellfish, tree nuts, peanuts, wheat or soybeans.

In related news, FDA has approved food manufacturers using statements that credit eating whole grain barley and barley-containing products as having the potential for reducing the risk of coronary heart disease.

Free Trade Area of the
Americas talks hit snag

Establishment of the Free Trade Area of the Americas is looking highly unlikely during the foreseeable future, but reviving negotiations is a responsibility of trade negotiators from Colombia.

The U.S.-sponsored free trade area would extend throughout North, Central and South America from Alaska to Tierra del Fuego. Reports from negotiators who were part of a Nov. 4-5, 2005, summit in Argentina note that Colombia has the responsibility of trying to bring two opposing sides led by the United States and Brazil together to agree to resume talks.

The Brazilian bloc of nations say talks can only resume when the United States agrees to dramatically reduce agricultural subsidies and farm support programs.

Notable Quotables

"For decades, agriculture has relied on our farm program as a sturdy bridge that gets us to the other side of the river and moves us on down our country road. Today that bridge is beginning to sag under the weight of change. We cannot afford to wait until that old bridge collapses, and we end up swimming for our lives..."
—American Farm Bureau Federation President Bob Stallman, during his annual address at AFBF's 87th annual meeting in which he urged agricultural producers' input in shaping U.S. farm policy.