June 4, 1999

U.S. consumers spent a little less at the grocery store during the second quarter of 1999. The American Farm Bureau Federation says retail prices are catching up to lower farm prices. Sixteen items were surveyed. The average price of the items declined 82 cents from the first quarter of 1999.

The 16 items on the survey cost $32.05 compared to $32.87 in the first quarter. That is the first average price decline since the first quarter of 1998 when the average cost declined 49 cents. The 82-cent decline could represent a retail reaction to low farm prices.

AFBF senior economist Terry Francl said, "It takes retail prices time to catch up with commodity prices. It takes those prices a little longer when the prices go down." An example is the decline in dairy prices. A gallon of whole milk declined 18 cents to $2.60 while a pound of cheese declined 11 cents to $3.15. Farm milk prices have fallen sharply throughout the year.

Eleven items declined in price including sirloin, cereal, corn oil, whole fryers, eggs, vegetable oil, white bread, mayonnaise and pork chops. Five increased in price: flour, potatoes, ground chuck, bacon and apples.

Volunteer shoppers from 32 states participate in the latest survey in mid-May.