After adjusting for inflation, the price of Easter eggs is at the lowest level in more than 20 years, down 4 percent from 1995. The real inflation-adjusted value of an 11-item subset of the Spring Picnic Marketbasket is $13.04, the lowest level since 2010. The informal survey completed by 117 volunteer shoppers across 31 states confirms that U.S. consumers continue to reap the bounty of a safe, abundant and high-quality food supply here in the U.S. while spending a small share of disposable income on food at home.
Spring Marketbasket Survey
This week AFBF released the results of the Spring Picnic Marketbasket Survey “Egg-Citing News – Food Prices Down for Easter.” The survey was completed by 117 volunteer shoppers across 31 states. Highlights of the survey revealed that continued declines in many commodity prices continue to be passed along to consumers through lower retail prices. The lower retail priced items include many of the livestock commodities including: eggs, beef, chicken, pork and cheese.
The informal survey showed the total cost of 16 food items that can be used to prepare one or more meals was $50.03, down $3.25 or about 6 percent compared to a year ago. Of the 16 items surveyed, 11 decreased, four increased and one remained the same in average price. Survey data on the 16-item basket dates to 2008, and the 2017 price is the third-lowest price observed since 2011. In 2011, retail prices were still recovering from recessionary levels; and in the third quarter of 2016 depressed prices for milk and dairy commodities resulted in the second-lowest market basket price over the 2011 to 2016 period.
While we only have survey data for the 16-item basket dating back to 2008, the volunteer shoppers have been collecting retail price data for 11 items dating to 1995. Thus, we have more than twenty years of retail price data for 11 products including apples, bacon, cheerios, Crisco oil, eggs, flour, ground chuck, potatoes, sirloin tip roast, white bread, and whole milk. Using only these 11 items, the value of the smaller spring basket was $31.79, down 8 percent from prior year levels. The price trends for these individual commodities are highlighted in Figure 1.
Over the last 22 years the price of the 11-item basket has increased by approximately 69 percent. All products experienced an increase in the nominal retail prices. The price increases range from a low of 13 percent for Crisco oil and Cheerios, to a high of 160 percent for bacon. All other products experienced nominal price increases of at least 40 percent. However, during this same time the consumer price index has increased by 60 percent – meaning some items may be cheaper in real dollars than they were in 1995.
Adjusting for Inflation
After adjusting the nominal prices for the 11-items for inflation, the Spring Marketbasket survey reveals that many of the items are cheaper in 2017 dollars than they were in 1995 dollars. For example, eggs (-13 percent), whole milk (-4 percent), Crisco oil (-29 percent), and Cheerios (-29 percent) are all lower in real dollars than in 1995. In real dollars, bacon remains a high-priced retail item, up 63 percent compared to 1995.
The inflation-adjusted price for the 11-item basket was $13.04, compared to a price of $12.59 in 1995, an increase of only 11 percent, Figure 3. The inflation-adjusted price for 2017 is the lowest price since 2010, and is below the ten-year average of $13.83.
These survey results confirm USDA estimates that the percentage of per capita income spent on total food expenditures has remained flat after adjusting for inflation. USDA estimates that in 2014 U.S. consumers spent 5.5 percent of their disposable income on food consumed at home, down sharply from 1960. The share of food at home expenditures has remained flat since 1995, and so too has the value of the Spring Picnic Marketbasket.