Food Cost Review, 1986

Abstract

Food prices, as measured by the Consumer Price Index, increased 3.2 percent in 1986, compared with a 2.3-percent rise in 1985. The larger rise partly reflected a 4.3-percent increase in meat, poultry, and fish prices whereas prices declined slightly in 1985. The prices farmers received for commodities, as measured by the farm value of USDA's market basket of foods, declined 1.3 percent. This decline and a much larger one in 1985 brought the 1986 farm value of foods to the lowest value since 1979. The farm-value share of a dollar spent at foodstores fell to 30 percent from 31 percent in 1985. The farm-to-retail price spread of USDA's market basket of foods rose by 3.7 percent, partly reflecting higher food industry labor costs from rising employment. Higher advertising, packaging, and other food marketing expenses also contributed to the rise in the farm-to-retail price spread.