New data provides more proof that the food vs. fuel debate is off base.
— From Southwest Farm Press
New data released by the federal government shows consumers are paying less for groceries today than they were just six months ago. This decrease comes amid increased production and use of ethanol, often the scapegoat of choice by food manufactures and meat processors when grocery prices rise.
According to the Consumer Price Index (CPI) released today by the Bureau of Labor Statistics, prices for groceries (food consumed at home) declined for the sixth straight month, and prices for all the major grocery store individual food groups declined compared to April.
In addition, the CPI for May found:
- Overall food prices (including food consumed both at home and away from home) decreased for the fourth consecutive month.
- Prices for food and beverages have increased just 2.7 percent in the last 12 months, which is well below the 30-year average for annual food inflation and less than half of 2008’s oil-fueled food inflation rate of 5.5 percent. USDA projects 2009 grocery prices will increase just 2.5 to 3.5 percent compared to 2008.
- Over the last 12 months, the overall Consumer Price Index has fallen 1.3 percent. This is the largest year-over-year decline since April 1950 and, according to the Bureau of Labor Statistics, is due mainly to a 27.3 percent decline in the energy index during that period. This underscores the fact that prices for all consumer goods, including food, are closely tied to energy prices.
- The gasoline index increased 3.1 percent in May after declining 2.8 percent in April. A much larger increase is expected in June, as retail gasoline and diesel prices have jumped in the last month.
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