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Chow down: Food prices fell in 2009 -- but not everyone notices

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By Steve Doyle

You may not realize it when you looked at the cash-register receipt, but you’ve been paying less lately for your groceries.

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Kentucky Farm Bureau just released its annual survey of food prices, and its figures show those prices declined 5.6 percent statewide in 2009.

KFB does these surveys through the year, and in December the cost of 40 popular grocery items was at $105.28, down from $111.63 at the start of the year. December’s totals were 11 cents higher than the previous survey in October.

Some shoppers in Shelby say they haven’t really noticed the change because they don’t pay that much attention to prices. “I guess you could say milk is down a little bit,” John Raizor said.

KFB’s survey found, in fact, that sirloin steak, pork chops and ham, butter, ice cream, potatoes and apples all declined in prices.

And its listed increases primarily were five poultry products, which collectively increased by 6.1 percent, and milk, which was up to $3.05 a gallon, or 35 cents more than October.

Other shoppers noticed those increased and added to the list.

“Sugar, eggs, coffee – they’re up,” Joyce Winburn of Shelbyville said. “Eggs are up a lot. You used to be able to find some under a $1. They might have been smaller eggs, but you could find them.

“Off-brand sugar is up, too. You expect that with names like Dominos, but not some of the others.”

Winburn also said that coffee prices had risen a long time and remained high. “They’re sort of like gasoline prices,” she said. “Once they saw they [coffee companies] could get those prices, they stayed high.”

Greta Prather of Shelbyville said she had noticed mainly that stores had less inventory. “In spices, you might find only one or two cans. I guess it’s inventory control.”

Prather said she had seen price increases in vegetables and produce and some overall increases earlier in the year. “Earlier I noticed a run up, but they’ve sort of settled a bit,” she said.”

Officials of Kroger did not return phone calls to determine how that grocer is experiencing changes in food prices. One employee, who requested anonymity because he is not authorized to speak for the company, said that in Shelbyville the store is seeing more buyers choose store-brand items, which inherently lowers prices.

Though most consumers consider such price reductions to be good news, that’s not always the case in agricultural communities such as Shelby County.

“The decrease in grocery cost is mostly on the backs of the dairy, pork and beef producers,” said John Wills of Shelby County Farm Bureau. “There isn't much pork production in Shelby County, but dairy farmers are really struggling, and our beef producers are having a hard time.

“Even if you are not a dairy, beef or pork producer in Shelby, you should be concerned about these below cost of production prices our farmers are getting for their product today.”

This lesson in supply-side economics can run much deeper and become even more complex. Farmers are losing money on the crops they sell because what they are paid for those items does not increase at the same pace as does their costs, and those difficulties trickle down to businesses that work with suppliers.

“Every time Shelby Co loses a dairy, farm suppliers lose some of their market, “Wills said. “That should be a concern to everyone in Shelby County.”

Even if a farmer who was in the dairy business converts his land to hay or the beef, he won’t need the supplies he need to produce dairy products.

“If consumers want to keep this affordable, safe supply of American grown food our framers will need to sell what they produce for more than their cost of production,” Wills said.