Consumers and Indiana Farm Bureau (INFB) know food prices have remained high, so it’s no surprise that a summer cookout this Fourth-of-July is going to cost more than it did last year. INFB’s new survey says Hoosier shoppers will pay about 8% more, a total of $69.47 for a ten-person cookout.
INFB Chief Economist Dr. Todd Davis explains USDA has been forecasting continued food price inflation.
“The overall CPI for all goods in the economy for May is pegged at 4% and the food at home is at 6.7%. So, just based on that forecast and that measure I’m not surprised to see this Market Basket survey result of an increase from last year,” says Davis.
That cookout price comes to about $6.95 per person. INFB 2nd vice-president Isabella Chism says that is still a very good deal given the rising costs for inputs needed to produce the food.
“Crop protection products and the actual seed that we put in, the fuel for the tractors and the combine and those kind of things, you put those all together and they’re not going down,” she told HAT. “But we do get some fluctuations in the price that we can market our crops for, but that’s very minimum compared to what actually the farmer receives for the crops that they produce. You know we as farmers are consumers too, so we’re seeing those same increases and feeling that same pinch at the grocery store, but then we also feel it on the farm and when we’re producing that food.”
She adds 14 cents of every retail food dollar comes back to the farmer after accounting for input costs, according to USDA guidance.
“So, if you look at the total price or cost of that meal for 10 people this July, $69.47, that equates to 10 dollars to the farmer. So, on the one hand there is some going back to the farmer. On the other hand, you have a lot of that cost going into the processing, packaging, transportation, retail distribution and food service,” says Chism.
For economist Davis, the survey’s increased cost shows economic recovery is underway.
“I think that we’ve seen continued demand for the meat, the protein sector, and even though the prices are up you still have strong demand for what farmers are producing. I think that that’s a very positive sign,” he said.
Davis added, “We are still seeing food inflation throughout the whole supermarket, specifically with items that require more processing, labor and transportation. This impacts items like cookies and chips that are non-perishable with no urgency to sell by a strict deadline, meaning grocery stores don’t need to discount to move inventory.”
The total market basket price includes ground beef, cheese, hamburger buns, pork chops, chicken breasts, pork and beans, potato salad, strawberries, chips, ice cream, cookies and lemonade.
All items on the shopping list are more expensive in Indiana than last year, except cheese and pork chops, which were relatively unchanged. Many items were less than the national average, including ice cream, strawberries, pork and beans, hamburger buns, lemonade and potato salad. The items that came in significantly above the U.S. average were chocolate chip cookies, chicken breasts and chips.
The INFB summer cookout market basket survey was conducted in early June by volunteer shoppers across the state who collected prices on specific food items from one of their local grocery stores. Volunteer shoppers were asked to look for the best possible prices, without taking advantage of special promotional coupons or purchase deals.
“This survey was conducted before many stores offer Fourth of July sales, so if you go to the grocery store now you are likely to see slightly reduced prices than what this market basket shows,” Davis said.
Source: INFB
