Retail food prices up slightly in 2006, bigger hike expected in 2007

WISCONSIN – Retail food prices in Wisconsin increased a modest 1.4 percent in 2006, with shoppers paying more for pork and vegetables, and paying less for dairy and chicken products, according to the year-end Market Basket survey released by the Wisconsin Farm Bureau Federation.
calendar icon 29 December 2006
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According to the Farm Bureau, the average price of the 20 food items in the survey increased 65-cents from $46.57 last year to $47.22 in 2006.

“Throughout the whole year we saw very little fluctuations in food prices, except for potatoes,” said a spokesman for the Farm Bureau.

“Our food production wasn’t hit by any major weather disasters. Consumer demand and production remained fairly consistent, although we did see our dairy prices decline during the middle of the year.”

Shoppers found dairy products less expense in 2006, with a gallon of milk down 16-cents and a pound of butter down 12-cents. The retail price for cheddar cheese remained the same in 2006, compared to the previous year.

The Farm Bureau said the drop in retail dairy prices correlates to lower farm milk prices. The price paid to Wisconsin dairy farmers was down 15 percent in 2006 from higher national milk production compared to the year before. The average price paid to Wisconsin farmers was $13.32 per one hundred pounds, compared to $15.56 the year before.

Cattle prices were also down slightly in 2006, but strong demand still help retail prices up with a pound of ground beef up 15-cents, and tip roast up 5-cents a pound compared to 2005.

The retail price for bacon and pork chops increased in 2006, with the price for ham dropping. A pound of bacon was 24-cents more and a pound of pork chops increased 17-cents. But the cost for ham dropped by 46-cents a pound. National pork production in the third quarter of the year hit an all-time high and prices paid to pork producers have dropped since July, and are about the same as last year.

The Farm Bureau reported that the price of whole chicken was 35-cents a pound less in 2006 because retail prices were higher in 2005 from damage done to poultry operations in the south by hurricanes Rita and Katrina.

An 80-cent jump in the price for a ten-pound bag of Wisconsin potatoes showed the biggest increase in any food item in the survey. The average price increased from $2.32 to $3.12. The Farm Bureau said the increase in retail prices correlates to a 20 percent jump in the prices paid for Wisconsin table stock potato compared to 2005. Potato production in Wisconsin was up about three percent and up about two percent nationally.

Tomatoes cost 26-cents a pound more in 2006, with higher prices in the first part of the year because of damage of winter crops in Florida done by hurricane Wilma last year.

A five-pound bag of flour dropped 18-cents and sugar dropped five-cents. A dozen eggs only cost one-cent more in 2006.

Food price forecast for 2007

According to the Consumer Price Index forecast through the USDA, food prices are expected to increase 2.5-3.5 percent in 2007, as retailers pass on higher energy and transportation costs to consumers in the form of slightly higher retail prices. Food-at-home prices are forecast to increase 2.0 to 3.0% in 2007, while food-away-from-home prices are forecast to increase 2.5 to 3.5% in both 2006 and 2007.

The Farm Bureau said sharply higher corn prices will have an affect on livestock producers, mainly those who purchase grain to finish feeding cattle, and this could push up prices for poultry, beef and pork in 2007. Currently, beef feedlot inventories are at record levels and exports have softened.

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