A spike in the price of animal feed is making milk much more expensive in Arizona, but other grocery prices have dropped - for now.

New figures Tuesday from the Arizona Farm Bureau Federation show the average cost of a gallon of whole milk was running $3.07 this past quarter. That's up more than 25 percent from the same period just three months earlier.

But that increase is more than offset by a price decline for most of the other items in a typical marketbasket, said Peggy Jo Goodfellow, the organization's marketing manager. The price tag for that basket is pegged at $47.97, down from $49.75 in the first quarter- and $3.22 less than the same period a year earlier for the same items.

Helping the bottom line for shoppers are lower prices for meat, especially ham and bacon. One likely reason is that grocery stores are trying to hang on to their shares of the market, Goodfellow said.

"In Arizona, our retailers are very competitive," she said. Various markets all ran pork specials during the time the Farm Bureau was doing its quarterly survey.

But Goodfellow cautioned that higher prices may be on the horizon, for the same reason that milk is now more expensive: the cost of feed. The only difference is timing.

"In dairy, it's more of an immediate reaction to the feed price because dairy is a 24-hour cycle," she said. But the current higher cost of feed won't show up in meat prices until later, when the animals go to market.

"We don't have a crystal ball on this, but it does look like we're going to see higher meat prices," she said.

That presents an opportunity for consumers who have large freezers and can shop at the current discounts, especially for pork and chicken, which has also come down in price.

Some items did see slight price increases in the last three months: orange juice, vegetable oil, toasted oat cereal and a bag of American salad mix.

The quarterly survey is based on what federation shoppers found at markets around the state. The prices do not reflect use of coupons or supermarket affinity cards that give discounts.


Item 2nd qtr 2013 1st qtr 2013

Red delicious apples (pound) $1.53 $1.59

Russet potatoes (5 pounds) $2.32 $2.35

Ground chuck (pound) $3.52 $3.68

Sirloin tip roast (pound) $5.69 $5.94

Sliced deli ham (pound) $3.69 $4.09

Bacon (pound) $4.07 $4.81

Boneless chicken breasts (pound) $2.55 $3.29

Whole milk (gallon) $3.07 $2.42

Shredded mild cheddar cheese (pound) $4.38 $4.43

Grade A eggs (dozen) $1.86 $1.90

All-purpose flour (5 pounds) $2.35 $2.36

Orange juice (1/2 gallon) $3.26 $3.17

Vegetable oil (quart) $2.40 $2.42

American salad mix (pound) $2.85 $2.80

Toasted oat cereal (8.9 ounce box) $3.15 $3.10

White bread (20 ounce) $1.19 $1.40

-- Source: Arizona Farm Bureau Federation

"We don't have a crystal ball on this, but it does look like we're going to see higher meat prices."

Peggy Jo Goodfellow, Arizona Farm Bureau Federation

Marketbasket of 16 selected basic items:

2013 2nd qtr - $47.97

2013 1st qtr - $49.75

2012 4th qtr - $50.54

2012 3rd qtr - $49.25

2012 2nd qtr - $51.19

2012 1st qtr - $50.79

2011 4th qtr - $51.39

2011 3rd qtr - $50.71

2011 2nd qtr - $51.31

2011 1st qtr - $47.85

Source: Arizona Farm Bureau Federation