Higher meat and dairy prices push up food costs. Farm prices finally hit strong levels.
DECEMBER 28, 2004-Retail food prices in Wisconsin jumped 5.7 percent in 2004 because of sharply higher prices for beef, pork and dairy products, according to the year-end Market Basket survey released by the Wisconsin Farm Bureau Federation. According to the Farm Bureau, the average price of the 40 food items in the survey increased $4.29 from $74.44 in 2003 to $78.72 in 2004.
A combination of strong demand for meat from high protein diets, and several factors leading to a tighter national milk supply, not only increased the price at the store, but also provided much needed price increases to farmers. The only savings in food prices in 2004 were from potato, bread and cereal.
A combination of an import ban of replacement cattle from Canada, higher grain prices, a national cooperative dairy supply management program, and increased consumer demand pushed up retail dairy prices by 14 percent in 2004. The Farm Bureau said farm milk prices will average 30 percent more in 2004 than in 2003.
A pound of butter accounted for the biggest jump in price in the survey, up 74-cents to $3.21; a pound of cheddar cheese increased 40-cents to $3.25; and a gallon of milk jumped 33-cents to $$2.87.
“These increases in dairy prices were not projected heading into 2004, but we knew meat prices would be higher from a trend that started late in 2003,” said Tom Thieding, director of public relations for the Farm Bureau. “Wisconsin dairy and livestock producers really deserved the higher prices they received for their products, but our potato growers still continue to struggle with low prices.”
Retail beef prices in the Market Basket survey increased 10 percent, with a pound of ground beef up 33-cents to $2.24, and a pound of roast beef 25-cents higher.
Prices paid to Wisconsin cattle producers averaged 6.7 percent more in 2004, compared to 2003. The Farm Bureau said cattle and retail beef prices would have been even higher if not for a cow-infected with BSE discovered in December 2003 that eventually resulted in a ban of shipments of beef to other countries.
Prices for retail pork products were 8.5 percent higher in 2004, following a 23 percent increase in prices paid to Wisconsin pork producers. A pound of bacon cost 43-cents more, ham cost 29-cents a pound more, and pork roast cost 12-cents more a pound.
Tomato prices spiked at the end of 2004, as hurricanes in Florida and rains in California damaged the fall crop. Tomatoes cost 19-cents a pound more for the year.
For the second year in a row, the prices paid to Wisconsin potato growers dropped, averaging just over 5-cents a pound. The average price for a ten-pound bag of Wisconsin potatoes dropped 13-cents to $2.48.
The Market Basket survey also reported savings on a loaf of white bread, a box of cereal and a head of lettuce.
Since the Farm Bureau started tracking food prices in 1993, food prices have increased an average of 2.9 percent a year, similar to changes in the USDA’s national food price index.
Food price forecast for 2005
According to the Consumer Price Index forecast through the USDA, food prices are expected to increase 3-4 percent in 2005. A U.S. household of four could see their annual food bills jump more than $295 on average in 2005 because of higher food prices, according to the USDA. The average cost of next year’s food bill for a family of four will be $8718.
Fresh fruits and vegetables. Retail prices are projected to increase the most next year, up 3.5-4.0 percent. Fruit and vegetable supply and prices are more susceptible to weather occurrences.
Beef. Consumer prices are expected to increase between 1.5 -2.5 percent for 2005. Beef prices are projected to continue to be stable, but could change if an export ban of beef to Japan and other countries is lifted.
Dairy. Retail prices are forecast to increase 2.5-3.5 percent in 2005. Economists are projecting farm milk prices in 2005 to be lower than in 2004, but still remain relatively strong.
Pork. Pork prices are expected to increase 2-3 percent. Pork production is expected to remain level during the year.
Poultry. The CPI for poultry is forecast to increase 1-2 percent in 2005, the same as in 2004.
Eggs. With egg production recovering from poultry disease in 2003 and 2004, eggs are forecast to decrease 1-2 percent next year.
Cereal and bakery products. Cereals and bakery product prices are forecast to increase 2.5-3.5 percent.
Market Basket Item Averages
Item | 2004 | 2003 | Change | Item | 2004 | 2003 | Change |
Ground beef, lb. | 2.24 | 1.92 | 0.33 | Oatmeal | 1.91 | 1.90 | 0.01 |
Roast beef, lb. | 3.38 | 3.12 | 0.25 | Cereal | 2.68 | 2.70 | -0.01 |
Chuck roast, lb. | 2.89 | 2.70 | 0.19 | Peanut butter | 1.84 | 1.90 | -0.06 |
Bacon | 4.36 | 3.93 | 0.43 | Spaghetti | 1.00 | 1.06 | -0.06 |
Ham, lb. | 2.06 | 1.77 | 0.29 | Spaghetti sauce | 1.84 | 1.82 | 0.02 |
Pork chops, lb. | 3.12 | 3.04 | 0.09 | Macaroni & cheese | 0.78 | .78 | -0.01 |
Pork roast, lb. | 2.26 | 2.14 | 0.12 | Flour, 5 lbs. | 1.65 | 1.55 | 0.10 |
Chicken, fryer, lb. | 1.20 | 1.04 | 0.16 | Sugar, 4 lbs. | 1.70 | 1.72 | -0.03 |
Chicken breast. lb. | 2.14 | 2.07 | 0.08 | Corn oil, 32 oz. | 2.09 | 1.87 | 0.21 |
Hot dog | 2.61 | 2.35 | 0.25 | Ketchup | 1.44 | 1.52 | -0.08 |
Bologna | 2.67 | 2.64 | 0.04 | Soup | 0.73 | .74 | 0.00 |
White milk, gal. | 2.87 | 2.54 | 0.33 | Corn | 0.77 | .77 | 0.00 |
2% milk, gal. | 2.60 | 2.33 | 0.27 | Apples, lb. | 1.06 | 1.03 | 0.03 |
Cheese, lb. | 3.25 | 2.85 | 0.40 | Bananas, lb. | 0.44 | .44 | 0.00 |
Butter, lb. | 3.21 | 2.45 | 0.74 | Potatoes, 10 lb. | 2.48 | 2.61 | -0.13 |
Margarine, lb. | 0.74 | .73 | 0.00 | Tomatoes, lb. | 1.75 | 1.56 | 0.19 |
Ice cream, 1/2 gal. | 2.40 | 2.34 | 0.04 | Lettuce, head | 1.06 | 1.14 | -0.08 |
Eggs, doz. | 1.06 | .96 | 0.10 | Peas | 1.28 | 1.28 | 0.00 |
White bread, 1-1/2 lb. | 0.85 | .87 | -0.02 | Orange juice | 1.20 | 1.17 | 0.03 |
Wheat bread, 1-1/2 lb. | 1.15 | 1.14 | 0.01 | Pizza | 3.98 | 3.95 | 0.03 |
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| TOTAL | $78.72 | $74.44 | 4.29 |
Totals may not add due to rounding
Market Basket Survey 1993-2004
1993 $60.22 1999 $70.17
1994 58.21 2000 70.88
1995 58.03 2001 73.45
1996 63.05 2002 73.82
1997 66.39 2003 74.44
1998 67.15 2004 78.72
Tom Thieding
Wisconsin Farm Bureau Federation
Executive Director, Public Relations
PO Box 5550
Madison, WI 53705
Phone: 608-828-5709
Fax: 608-828-5718
Web site: www.wfbf.com
