When consumers see higher prices in the grocery store, some of them seem to think the increases are a result of higher prices received by farmers.

"Sometimes, for some products, this may be true," said Indiana Farm Bureau Second Vice President Carolyn Hegel, "but not always, and certainly not in Farm Bureau's latest survey of grocery store prices."

Overall, the prices Indiana farmers received for their commodities have been fairly stable since last quarter's "market basket" survey, which was taken in May - yet the prices paid by consumers reached an all-time record level in the latest survey, which was taken in August.

The survey showed that the average price for 16 basic food items increased from $35.97 in May to $37.09 in August. The total for the same quarter was $35.21.

The IFB survey is part of a national survey coordinated by the American Farm Bureau Federation. Fifty-two volunteer shoppers in 23 states, including Indiana, participated in the national survey, which showed an increase of 42 cents in the total cost of the 16 basic food items. The $36.46 paid by volunteer shoppers is $1.48 higher than the 2002 third quarter average.

Despite the overall increase in total average cost since the survey began in November 1989, the average Indiana cost is still only $7.68 higher than the inaugural average of $29.41.

"Overall, food costs less in the United States than anywhere else in the world," said AFBF senior economist Terry Francl. "On average, American consumers spend less than 10 percent of their disposable income on food."

Of the 16 items on the survey, six showed decreases, most of just a few cents. The most significant decreases were for cheese, which dropped by 19 cents to $3.29 per pound, and milk, which decreased by 7 cents to $2.53 per gallon.

"Dairy farmers are still struggling with depressed milk prices, which is affecting consumer prices," said Francl. Large supplies of milk, cheese and butter have further depressed prices, he added.

"It's interesting that while the milk prices that farmers receive were still below the cost of production at the time this survey was taken, the price of milk isn't much lower than it was when the farm price was at much higher levels," Hegel said.

She noted that, for example, when farm milk prices reached a record $17.90 per 100 pounds in late 1998, the grocery store price for milk was $2.58 per gallon. Even though the farm price during the current survey was less than $12 per 100 pounds, the grocery store price on the current survey is down only 5 cents compared to the 1998 figure.

"The price farmers receive for the milk - and for many other farm products as well - isn't reflected very accurately in the price consumers pay," she said.

The other items that dropped in price decreased a few cents each. These are whole fryers, apples and a 32-ounce bottle of corn oil,which dropped by 3 cents each, and potatoes, which dropped by 1 cent per pound.

Of the 10 items that showed increases, the largest increase was for vegetable oil, which rose by 35 cents per 32-ounce bottle to $2.65. Also showing increases were pork chops, which rose by 25 cents/pound to $3.16; cereal, up 25 cents per 10-ounce box; and white bread, up 34 cents for 20-ounce loaf to $1.68.

Other items that increased were: eggs, up 12 cents/dozen to $1.11; bacon, up 7 cents/pound to $3.06; flour, up 7 cents/5-pound bag to $1.50; mayonnaise, up 5 cents/32-ounce jar to $3.12; ground chuck up 5 cents/pound to $1.93; and sirloin tip roast, up 4 cents/pound to $3.38.

Although retail grocery store prices have shown a steady increase since the survey's initial average of $29.41 in November 1989, the amount of the food dollar received by America's farmers and ranchers has actually dropped. According to the latest Agriculture Department data, the farm value of each dollar spent on food in the U.S. is about 19 cents, which is down significantly from 41 cents in 1950 and 31 cents as recently as 1980. [[In-content Ad]]