At the dawning of a new year, remembrances of the previous one give way to what lies ahead. Christmas decorations are boxed and stored for another year, and tax preparation is underway.
Last year will be recorded as a year of extreme weather events, fluctuating energy costs and increasing food prices. Many agricultural states hit by floods, droughts and wind faced challenging growing and harvesting conditions. In turn, food prices were affected.
The American Farm Bureau tracks food prices each quarter on 16 items that represent a cross-section of agricultural products. The fourth quarter results reveal food prices continued to climb in supermarkets across Missouri. A deviation from the norm, this quarter’s Missouri average was higher, at $52.01, than national prices, which ended at $49.23.
Up from $49.32 in the third quarter, Missouri’s average prices increased $2.69. In the fourth quarter of 2010, the items cost $47.87, revealing an increase of $4.14 year over year.
Since last quarter, 11 items increased in price, four decreased and one remained the same. About 44 percent of the increase could be accounted for at the meat counter, where five of the six items cost more while one remained the same.
The fruit and vegetable aisle accounted for another 38 percent of the quarter’s increase. Three of the four items on our list—russet potatoes, salad mix and orange juice—cost more, while Red Delicious apples cost slightly less per pound.
No obvious patterns appeared in other groupings. Shredded cheddar cheese prices increased, while whole milk prices dropped. Flour prices decreased, while bread prices increased.
Energy costs remain a wild card in food prices. Keeping an eye on the price of fuel and the per-barrel price of oil provides some insight into fluctuations in food prices. Supply and demand impact prices as recovery continues from the summer weather events and foreign demand for American food increases.
What does 2012 hold in store for food prices? Economists feel prices will return to a more normal pattern of increase as food price inflation subsides.
Farmers are an important part of the food supply chain. Once the commodity leaves the farm, other costs including transportation, processing, packaging and marketing, as well as supply and demand, impact what the consumer pays.