Marketbasket costs drop in 1st quarter

Beef prices dropped despite drought that's increased feed costs
2013-04-12T00:00:00Z Marketbasket costs drop in 1st quarterHoward Fischer Capitol Media Services Arizona Daily Star
April 12, 2013 12:00 am  • 

For Arizona grocery shoppers, meat prices took an unexpected drop during the first quarter of the year.

New figures Thursday from the Arizona Farm Bureau Federation show the average cost of a typical marketbasket of 16 grocery items was $49.75. That is a drop of 79 cents from the last quarter of 2012.

It also is below the same period a year earlier.

The prices of some items went up, including bacon, flour, vegetable oil, cereal and orange juice, noted Julie Murphree, the federation's public-relations director.

But price drops for beef, chicken and ham made the difference.

"I'm a little bit surprised," Murphree said.

She said prices of beef in particular had been rising for awhile, fueled by the drought, which drove up the cost of feed.

"Feed prices for our cattlemen are still high, higher than they'd like to see them," Murphree said.

So what gives?

It's likely that grocers are absorbing some of the higher wholesale costs - and accepting smaller profit margins - to maintain market share, she said.

"They're kind of absorbing that cost and not wanting to pass it on the consumer right now," she said.

By keeping prices as low as possible, the retail grocers can spur consumers to reconsider if they had abandoned beef, particularly the more expensive cuts, when prices went up, she said.

"For you and I in our pocketbooks, that's kind of nice."

Consumers may want to take advantage of the current meat prices, she said, especially if they have freezers.

Corn and soybean production remain tight, suggesting meat prices will eventually be forced up again. As long as feed costs are high, ranchers will cull the size of their herds, meaning less beef on the market, she added.

Other items in the marketbasket that slid in price include eggs, cheese and milk.

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

Price of the Basket over 4-year period

Market basket of 16 selected items:

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

2010 4th qtr $45.44

2010 1st qtr $45.96

2009 4th qtr $45.89

2009 1st qtr $54.43

Source: Arizona Farm Bureau Federation

Item-by-item breakdown

Item 1st qtr 2013 4th qtr 2012

Red delicious apples (pound) $1.59 $1.57

Russet potatoes (5 pounds) $2.35 $2.23

Ground chuck (pound) $3.68 $3.83

Sirloin tip roast (pound) $5.94 $6.19

Sliced deli ham (pound) $4.09 $4.76

Bacon (pound) $4.81 $3.89

Boneless chicken breasts (pound) $3.29 $3.97

Whole milk (gallon) $2.42 $2.82

Shredded mild cheddar cheese (pound) $4.43 $4.81

Grade A eggs (dozen) $1.90 $1.98

All-purpose flour (5 pounds) $2.36 $2.32

Orange juice (1/2 gallon) $3.17 $3.05

Vegetable oil (quart) $2.42 $2.08

American salad mix (pound) $2.80 $2.66

Toasted oat cereal (8.9 ounce box) $3.10 $2.94

White bread (20 ounce) $1.40 $1.44

Source: Arizona Farm Bureau Federation

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