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July 16, 2008   Email to Friend 

FUEL COSTS PUSH FOOD PRICES HIGHER
Jeff Helms
(334) 613-4212
July 16, 2008

About 44 percent of the increased cost of food can be attributed to fuel, transportation and energy costs.
MONTGOMERY, Ala. -- Higher fuel costs associated with processing and transporting food took a toll on Alabama grocery prices in July as the average cost of 20 basic market basket items increased 1.5 percent. According to the Alabama Farmers Federation's monthly food price survey, the market basket averaged $52.53, up 79 cents from June.

The American Farm Bureau Federation (AFBF) estimates about 44 percent of the increase in food prices can be attributed to higher fuel, transportation and energy costs. "Prices of many food items continue to creep upward," said Jim Sartwelle, an AFBF economist. "Those increases, however, pale in comparison to the huge increases in energy costs - for fuel, natural gas and electricity - that American families have become accustomed to over the past two or three years."

Food price reports collected by volunteer shoppers across Alabama July 1-10 revealed that families were paying more for pork, eggs and milk than a month ago, while the average prices for steaks, chicken breasts and tomatoes actually declined.

At the meat counter, pork chops were up 9 cents to $3.41 a pound; bacon was up 13 cents to $3.56 a pound; and Boston butts were a nickel higher at $1.81 a pound. T-bone steaks, however, were down 19 cents to $8.68 a pound, and ground beef fell 4 cents to $2.19 a pound. These savings were partially offset by chuck roasts, which increased 11 cents to $3.37 a pound. Poultry prices were mixed with whole fryers averaging $1.25 a pound, up 12 cents, while chicken breasts were down 7 cents to $2.02 a pound. After falling 17 cents in June, eggs rebounded this month to $1.79 a dozen, up 23 cents.

On the produce aisle, tomatoes were down 18 cents to $1.69 a pound, and sweet potatoes were down a nickel to 90 cents a pound. Red potatoes, though, were up a penny to 76 cents a pound, and lettuce increased 8 cents to $1.40 a head.

Prices also were mixed in the dairy case where a half-gallon of milk averaged $3.18, up 14 cents, while a half-gallon of name-brand ice cream was unchanged at $4.22. Cottage cheese was a penny lower at $2.60 a pound, but butter increased 15 cents to $3.51 a pound.

Regional reports collected from throughout the state showed the market basket averaged $51.15 in northeast Alabama, $52.71 in the central counties, $52.86 in the northwest corner of the state and $54.36 in south Alabama.

Alabama Farmers Federation, a member of the American Farm Bureau Federation, is the state's largest farm organization. Its volunteer members conduct the informal monthly market basket survey as a tool to reflect retail food price trends. In the mid-1970s, farmers received, on average, about one-third of consumer retail food expenditures for food eaten at home and away from home. That figure has decreased steadily over time and is now just 19 percent, according to Agriculture Department statistics.


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