2012 COLA Watch – Preliminary Information – July Through September Food Prices

The American Farm Bureau Federation, a private organization which refers to itself as “the Voice of Agriculture,” publishes a quarterly Market Basket Survey of 16 common items which are very commonly purchased. You can see them below. They always use the same 16 items. They contact a small number of retailers which seem to be, based on the prices, in areas where there are a lot of farms.

The refer to their survey as “unscientific” but they also say that it “… tracks with the federal government’s Consumer Price Index report for food at home,” which means to me that their results are similar to the BLS’s for this segment.

Here are the Market Basket Survey numbers for the quarter from July through September 2011 (which is the same quarter which determines the 2012 COLA.)

Item Qty Jun Price Sep Price Amt Change % Change
Bacon 1 lb $4.18 $4.41 $0.23 5.5%
Bagged Salad 1 lb $2.67 $2.73 $0.06 2.2%
Boneless Chicken Breasts 1 lb $3.09 $3.33 $0.24 7.8%
Bread 20 oz $1.86 $1.88 0.02 1.1%
Eggs 1 doz $1.65 $1.78 0.13 7.9
Flour 5lbs $2.52 $2.73 $0.21 8.3%
Ground Chuck 1 lb $3.29 $3.27 ($0.02) -0.6%
Orange Juice 1/2 gal $3.18 $3.28 $0.10 3.1%
Red Delicious Apples 1 lb $1.56 $1.83 $0.27 17.3%
Russet Potatoes 5 lb $3.07 $3.43 $0.36 11.7%
Shredded Cheddar Cheese 1 lb $4.56 $4.70 $0.14 3.1%
Sirloin Tip Roast 1 lb 4.48 $4.28 ($0.20) -4.5%
Sliced Deli Ham 1 lb $5.26 $5.43 $0.17 3.2%
Toasted Oat Cereal 9 oz $4.18 $4.18 $0.00 0.0%
Vegetable Oil 1 qt $3.01 $3.21 $0.20 6.6%
Whole Milk 1 gal $3.62 $3.66 $0.04 1.1%
Totals $51.17 $54.13 $1.95 3.8%

In other words, thirteen of sixteen items increased in price during the July through September quarter, two decreased in price, and one remained the same. The current quarter Market Basket Survey results may be seen at Global Demand Drives Food Prices Higher in Third Quarter. It is very interesting reading.

The CPI-W results – the first number is the percentage of the total CPI-W that that category represented, and the remaining three numbers are the percentage of the increase (or decrease) which occurred during that period. The line labeled “Food at home” includes all items listed underneath it. The line labeled “Other food at home” includes the three items listed underneath it.

% Of Total CPI-W May Thru Jun Jun Thru Jul Jul Thru Aug
Food at home 8.906% 0.1% 0.6% 0.6%
Cereals and bakery products 1.236% 0.6% -0.1% 1.1%
Meats, poultry, fish, and eggs 2.227% -0.4% 0.4% 0.4%
Dairy and related products .917% 0.4% 1.2% 0.9%
Fruits and vegetables 1.219% -0.5% 1.2% 0.7%
Nonalcoholic beverages and beverage materials 1.091% 0.3% 0.8% -0.1%
Other food at home 2.217% 0.5% 0.4% 0.8%
Sugar and sweets .324% 1.1% -0.1% 1.2%
Fats and oils .258% 1.3% 0.7% 1.0
Other foods 1.635% 0.2% 0.4% 0.7%

Bear in mind that the CPI-W tracks changes in costs for urban wage earners and clerical workers, while the prices shown on the Market Basket Survey seem to be more reflective of those paid in more rural areas. Nevertheless, the increase in prices for July and August is about 1.2% for food at home, while the Market Basket Survey indicates that food at home increased 3.8% for the entire quarter. Another item to consider is that food at home is 8.9% of the total CPI-W. Overall, I expect to see a sharp increase in the cost of food at home (and other food costs) in September.

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2 Responses to 2012 COLA Watch – Preliminary Information – July Through September Food Prices

  1. Newman Gentry says:

    Just thought I would let you know how much I enjoy your posts.

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