Deflation has finally come to the Arizona shopping cart. New figures from the Arizona Farm Bureau Federation find that, on average, the cost of food from grocery stores in the state is about 20 percent less than it was a year ago.
Deflation has finally come to the Arizona shopping cart.
New figures from the Arizona Farm Bureau Federation find that, on average, the cost of food from grocery stores in the state is about 20 percent less than it was a year ago. Some of the declines are even sharper: For what Arizonans paid a year ago for a gallon of milk, they can now buy two.
Peggy Jo Goodfellow, the organization's marketing manager, said some of the decreases have been a long time in coming.
She said that prior price hikes have tracked along with two costs: The raw commodities that make up the finished products, and the fuel costs for running everything from farm equipment to delivery trucks.
Now, she said, with the price of both dropping, so is the cost of the finished products.
But the situation, at least in Arizona, is more complex. Goodfellow said that, for the first time since her organization has been tracking these prices, costs to Arizona consumers are, on average, no higher than the national average. And in some cases, they are even lower.
She said that, historically, that has not been the pattern, given that many of the items Arizonans consume are not grown or made here but come from somewhere else.
The difference, she said, appears to come at the grocery store level.
"Maybe our retailers are showing some relief on their end and therefore they're passing it on to the consumer," Goodfellow said.
Less clear is the role of competition in driving prices low as retailers like Fry's, Safeway, Bashas' and Albertsons - and their low-cost sister stores - are going after customers being sought by Wal-Mart and Super Target stores that have large food sections.
Goodfellow said, though, that all retailers are trying to push down their costs. She said that has resulted in many of them doing more to find sources within the state.
"In buying local, they're able to pass the savings of not transporting their product onto the consumer," she said. Goodfellow said there are Arizona producers for not only eggs and milk but also beef and pork.
How long prices will remain low is anyone's guess.
Goodfellow said that Jim Sartwelle, economist for the American Farm Bureau, believes prices will stay "pretty much status quo" for the rest of 2009.
"He said after the first of the year, he'll re-evaluate," she said.
|Item||3Q 2009||2Q 2009||3Q 2008|
|Red delicious apples||$1.22||$1.40||$1.89|
|Russet potatoes (5 lb.)||2.31||2.51||3.39|
|Sirloin tip roast||4.85||4.64||4.99|
|Sliced deli ham||4.48||4.98||NA|
|Boneless chicken breast||2.72||6.49||NA|
|Whole milk (gallon)||1.95||2.57||3.95|
|Shredded mild cheddar||3.95||4.87||5.59|
|Eggs (Grade A one dozen)||1.80||1.72||2.25|
|All purpose flour (5 lb.)||2.42||2.80||3.69|
|Orange juice (1/2 gallon)||3.07||3.33||NA|
|Vegetable oil (1 quart)||2.74||3.36||3.95|
|American salad mix||2.91||2.95||NA|
|Toasted oat cereal (8.9 oz. box)||2.90||3.21||NA|
|White bread (20 oz. loaf)||1.53||1.63||1.59|
NA = no comparable item surveyed same time last year
Note: All items one pound unless otherwise noted
Source: Arizona Farm Bureau Federation