The latest American Farm Bureau Federation (AFBF) Marketbasket Survey was released in July, 2007. The informal survey shows the total cost of 16 basic grocery items in the second quarter of 2007 was $42.95, up about 4 percent or $1.61 from the first quarter of 2007. A total of 82 volunteer shoppers in 32 states participated in the latest survey, conducted during May. Of the 16 items surveyed, 14 increased, one decreased and one stayed the same in average price compared to the 2007 first-quarter survey. Compared to one year ago, the overall cost for the marketbasket items showed an increase of about 8 percent. Regular whole milk showed the largest quarter-to-quarter price increase, up 34 cents to $3.46 per gallon.

As retail grocery prices have gradually increased, the share of the average food dollar that America’s farm and ranch families receive continues to decrease. “In the mid-1970s, farmers received about one-third of consumer retail food expenditures on average. That figure has decreased steadily over time and is now just 22 percent according to Agriculture Department statistics,” AFBF Economist Jim Sartwelle said. AFBF, the nation’s largest general farm organization, conducts its informal quarterly marketbasket survey as a tool to reflect retail food price trends. According to USDA statistics, Americans spend just under 10 percent of their disposable income on food annually, the lowest average of any country in the world.

Milk Price Trends

The most recent Marketbasket Survey has begun to track the prices of conventional milk, rbST-free milk, and organic milk.

No surprises here - rbST-free and organic cost a whole lot more! More of the old “smoke and mirrors” marketing campaign of charging a whole lot more money for nothing. As readers of my Blog know there are no compositional differences within a fat category among conventional, rbST-free and organic milks.

For the second quarter of 2007, shoppers found the average price for a half-gallon of regular whole milk to be $2.22. The average price for one gallon of regular whole milk was $3.46. Comparing per-quart prices, the retail price for whole milk sold in gallon containers was 28 percent lower compared to half-gallon containers, a typical volume discount long employed by retailers.

The average price for a half-gallon of rBST-free milk was $3.01, 36 percent higher than a half-gallon of regular milk. The average price for a half-gallon of organic milk was $3.65, 64 percent higher than a half-gallon of regular milk.

These data agree with my own observations. I was in Minneapolis, MN the week of July 22, 2007 and did an informal survey of milk prices in several different grocery store chains. Interestingly, the differential between conventional and rbST-free was the same for the different chains - the rbST-free cost $1 a gallon more compared to conventional milk! Wonder how these stores got the same markup? That is fodder for another blog.