Prices for 16 basic food items shoot up in third quarter

Flour, potatoes, cheddar cheese and apples show the largest increases.

From Bloomberg News

October 3, 2008

Supermarket prices for 16 basic food items surged to a record in the third quarter because of higher commodity costs and increased processing and transportation expenses, the American Farm Bureau Federation said Thursday.

The average cost of typical weekly consumer purchases rose 11% to $48.68 in the three months ended Sept. 30, from $44.03 a year earlier, the federation said. Costs rose 4.3% from the second quarter.

"Sustained high costs for processing, hauling and refrigerating food products are reverberating at the retail level," said Jim Sartwelle, an economist for the federation.

The share of the food dollar that went to farmers and ranchers fell to 19% in the quarter, the lowest in the quarterly survey's 20-year history and down from about 32% in 1980, the federation said.

Retail prices for flour, potatoes, cheddar cheese and apples showed the largest increases in the quarter. A 5-pound bag of flour cost $2.62, up 37% from a year earlier, while 5 pounds of potatoes rose 32% to $3.38. Prices for cheddar cheese and apples surged 21%.

Vegetable oil rose 17%, a dozen eggs jumped 13%, pork chops were up 6.8% and hamburger cost 5% more, the federation said.

Corn futures surged 70% on the Chicago Board of Trade during the quarter from a year earlier, wheat increased 11% and live cattle rose 8.2%.

Food-price inflation may run as high as 6% this year, the highest since 1980, the U.S. Department of Agriculture said.

A total of 74 volunteer shoppers in 32 states participated in the survey, conducted in August, the Farm Bureau Federation said.