Even with dip in meat costs, food prices remain steady overall - Ahwatukee Foothills News: City News

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Even with dip in meat costs, food prices remain steady overall

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Posted: Thursday, April 11, 2013 12:27 pm

Arizona shoppers are getting a bit of a financial reprieve as prices for meat took an unexpected -- and potentially unexplained -- drop during the first quarter of the year.

New figures Thursday from the Arizona Farm Bureau Federation show the average cost of a typical shopping basket of 16 items was $49.75. That is a drop of 79 cents from the last quarter of 2012.

It also is below the same period a year earlier.

Julie Murphree, the agency's public relations director, noted that the price of a whole bunch of items went up. These range from food preparation needs like flour and vegetable oil to cold cereal and orange juice.

But what made the difference, she said, were price drops in beef, chicken and ham.

``I'm a little bit surprised,'' Murphree conceded.

She said prices of beef in particular have been rising for awhile, fueled by the drought which in turn has driven up the cost of feed.

``Feed prices for our cattlemen are still high, higher than they'd like to see them,'' Murphree said.

So what gives?

Murphree said it's likely that grocers are just absorbing some of the higher wholesale costs -- and accepting smaller profit margins -- just to maintain market share.

``They're kind of absorbing that cost and not wanting to pass it on the consumer right now,'' she said.

Part of that, Murphree said, comes down to the simple question of economics.

``There's been a softening of demand across the board,'' she said. Murphree said that by keeping prices as low as possible the retail grocers can spur consumers who had abandoned beef when prices went up -- particularly the more expensive cuts -- to reconsider.

The winners, she said, are shoppers.

``For you and I in our pocketbooks, that's kind of nice,'' she said.

Murphree said that consumers may want to take advantage of the current meat prices, especially if they have freezers.

She said that corn and soybean production remain tight, suggesting that will eventually force up prices again. And Murphree said that as long as feed costs are high, ranchers will cull the size of their herds, meaning less beef on the market.

Other items in the shopping basket that have slid in price include eggs, cheese and milk.

The quarterly survey is based on what federation shoppers found at markets around the state. Murphree said the prices do not reflect use of coupons or the affinity cards that many supermarket chains provide which give holders additional discounts.

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