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Monday, October 06, 2008
Filling the Grocery Cart Costing 10.5% More
Matt Andrejczak
MarketWatch
SAN FRANCISCO--Families have been feeling increasing financial pain at grocery-store cash registers, exacerbating their difficulties in the souring U.S. economy.
Here's how much it hurts: A basket of 16 basic food items cost $48.68 over the past three months, up 10.5% from a year ago, the American Farm Bureau Federation said Thursday.
The latest survey from the nation's largest farm organization underscores the pressures reverberating throughout the food chain, from the American farm to the executive suites of the largest U.S. packaged-food manufacturers.
Besides the elevated costs for basic food ingredients, rising energy prices have boosted processing, hauling, and refrigerating expenses for food makers including Kraft Foods Inc. (KFT) and Campbell Soup Co. (CPB)
Potatoes, cheddar cheese and apples posted the largest price gains from the second quarter of this year. A five-pound bag of potatoes cost $3.38, up 83 cents. Cheddar was $4.91 a pound, up 31 cents. Apples fetched $1.80 a pound, up 26 cents.
Among other items that rose are the following: pork chops, up 22 cents to $3.62 a pound; ground chuck, rising 10 cents to $2.95 a pound; and whole milk, costing 4 cents more at $3.92 a gallon.
On the downside, large eggs fell for the second consecutive quarter to $1.71 a dozen, down 11 cents, while a 20-ounce loaf of white bread also dropped 11 cents to $1.79. Bacon fell 6 cents a pound to $1.43.
The American Farm Bureau conducts its informal survey on a quarterly basis. The latest reading of how stretched the American grocery budget has become was done by 72 volunteer shoppers in 32 states during the month of August. Americans spend about 10% of their disposable income on food each year -- the lowest of any country worldwide, according to the U.S. government.
Grocery-chain operators Supervalu Inc. (SVU) , Safeway Inc. (SWY) and Whole Foods Markets Inc. (WFMI) all have been grappling with more frugal shoppers as job losses and the housing downturn have pinched consumers.
Shoppers have been trading down some to what are called private-label products, while discounters Costco Warehouse Corp. (COST) and Wal-Mart Stores Inc. (WMT) have been seeing a pickup in their grocery aisles.
Copyright © 2008 MarketWatch, Inc.
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If you've seen TV footage of an active trading pit, you've probably noticed the atmosphere is uproarious and wild. The reason for all the shouting? Open outcry.
On exchange floors that use the open-outcry system, traders shout prices they want to sell while others yell back the price they want to buy at. They also use hand gestures to communicate with each other.
This system has been used for a long time, but is being replaced with modern technology. Some argue electronic exchanges can do the job faster and more accurately. One of the few exchanges that continue to use open outcry is the New York Mercantile Exchange.
