Posted: 01.06.2010

The lower food price trend that consumers enjoyed in 2009 continued right until the very end according to the latest Market Basket suvey from the Wisconsin Farm Bureau Federation.

The Market Basket survey found that the average retail prices for 20 monitored food items in 26 different markets around the state dropped another 61-cents for an average fourth quarter price of $51.49.  The average cost in the fourth quarter of 2009 is $6.41 or 11-percent less than the fourth quarter of 2008 when the overall food package came in at $57.91

The biggest factor to lower food prices in 2009 was connected to lower fuel and energy prices.  Lower energy prices result in less cost for production, processing, transportation, and storage of food. Over the
past year, U.S. fuel and energy prices decreased 28% according to the U.S. Bureau of Labor and Statistics Consumer Price Index (CPI). A second major factor is continued sluggish consumer demand as reported by the American Farm Bureau Federation (AFBF).

The item with the largest percent decrease in the fourth quarter was butter. A pound of butter dropped 24-percent in the fourth quarter alone!  The average price came in at just $2.48 a pound.

Although prices paid to farmers for milk have increased slightly through the second half of 2009, butter has a longer storage life than milk.  Butter sold in the fourth quarter was probably made from milk produced earlier in the year.
 
Also the Wisconsin Farm Bureau Federation (WFBF) made a change in
the type of butter surveyed. Surveyors are now allowed to use the store
brand of butter rather than a premium brand name. That change alone
would cause a slight decrease in the price of butter reported.
 
A gallon of whole milk did track more closely to the farm prices for milk. The
retail price for a gallon cost 13-cents more than the third quarter with
a fourth quarter price of $2.72. This is 53-cents less than the fourth
quarter 2008 price of $3.25. A pound of cheddar cheese was $3.94 in the
fourth quarter of 2009, just 7-cents more than the third quarter of 2009
and 22-cents less than the fourth quarter of 2008.

Potato prices were also down significantly in the fourth quarter. A
10-pound bag of Russet potatoes was $2.98 in the fourth quarter,
42-cents less than the third quarter and $1.33 less than the same time
last year. "Potato prices are seeing the effect of supply and demand
just as we saw in 2008," says Paul Ketring, Director of Communications
for WFBF. "Potato prices saw large increases in the second half of 2008
when flooding and lower yielding harvests reduced the supply. In 2009,
the U.S. potato harvest set a yield record, increasing supply, with less
flooding in Wisconsin and the rest of the Midwest."

Pork continued to see low retail prices. A pound of pork chops was
$3.21 in the fourth quarter, down 28-cents from the third quarter of
2009 and down 47-cents from the same time last year. Bacon, flour, and
sugar also decreased in this quarter's survey.

The price for a pound of tomatoes was up 44-cents in the fourth quarter
of 2009 at $1.83. Retail prices for chicken breasts and whole chicken
both increased as well. Ground sirloin and sirloin tip roast saw almost
no change from the third quarter of 2009.

According to the United States Department of Agriculture, the average
price farmers received for their products from November to December of
2009, as well as compared to a year ago, remained flat or showed negligible changes. 

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