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April 17, 2007   Email to Friend 

GROWING DEMAND FOR CORN PUSHES MEAT PRICES HIGHER
Jeff Helms
(334) 613-4212
April 17, 2007

MONTGOMERY, Ala. -- Growing demand for corn to produce ethanol is putting the squeeze on livestock and poultry producers and causing prices at the supermarket to increase. According to the Alabama Farmers Federation's monthly food price survey, higher meat prices pushed the average cost of 20 basic market basket items eight-tenths of 1 percent higher in April. Reports collected by volunteer shoppers around the state April 1-8 showed the market basket averaged $48.56, up 39 cents from March.

Federation Pork and Poultry Director Guy Hall said higher prices for corn -- a major component of feed -- have increased the cost of production for meat and poultry products. Ironically, farmers have not seen their wholesale prices increase. Instead, processors, in some cases, have cut production to make up for the loss of revenue caused by higher feed prices.

"Even though prices on retail products have increased, farmers have not seen any direct benefit at the farm level," Hall said. "Some poultry producers have seen their downtime between flocks increase, and pork producers who purchase their feed have seen corn costs increase by as much as 75 percent during the last year. The U.S. Department of Agriculture predicts that higher feed costs will force reductions in pork, poultry and beef production this year equal to 1.7 pounds of meat per person."

April's food price survey showed the average price of pork chops increased 10 cents to $3.18 a pound, and bacon was up 27 cents to $3.53 a pound. Boston butts, however, were down 9 cents to $1.78 a pound. Beef prices also were up with ground beef averaging $2.23 a pound, an increase of 15 cents. Chuck roasts averaged $3.31 a pound, up 15 cents, while T-bone steaks were down 7 cents to $8.05 a pound. Poultry prices were mixed with whole fryers falling 6 cents to $1.03 a pound, but chicken breasts were more expensive at $2.25 a pound, up 15 cents. Eggs were up a penny to $1.37 a dozen.

On the produce aisle, tomatoes were a good buy at $1.55 a pound, down 7 cents, as were sweet potatoes, which were a dime cheaper at 72 cents a pound. Lettuce, however, was up 23 cents to $1.51 a head, and red potatoes increased 3 cents, to 79 cents a pound.

In the dairy case, shoppers could save on butter, which dropped 11 cents to $2.95 a pound, and ice cream, which was down 4 cents to $4.02 a half-gallon. Meanwhile, milk prices edged 2 cents higher to $2.74 a half-gallon.

Regional reports collected around the state showed the market basket averaged $47.23 in the northwest corner of the state, $47.33 in northeast Alabama, $49.52 in the central counties and $51.88 in south Alabama.

Alabama Farmers Federation, a member of the American Farm Bureau Federation, is the state's largest general farm organization. It conducts its informal monthly market basket survey as a tool to reflect retail food price trends. According to Agriculture Department statistics, Americans spend just 9.5 percent of their disposable income on food annually, the lowest average of any country in the world. On average, farmers receive less than 23 cents of every dollar spent on food.


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