by David A. Arnott –
A dozen eggs costs less than $1. Grass-fed ground beef costs less than $5 per pound. Welcome to low food prices.
For nine straight months, food prices have fallen, a pattern with little precedent outside of recessions, according to a Bloomberg report, and a trend largely attributable to a confluence of low oil and grain prices and tough competition from discounters moving into the grocery space.
Shoppers are learning to seek out bargains wherever they may be instead of shopping for all their groceries at a single store, the report said. That process has been aided by the likes of Wal-Mart (NYSE: WMT) and Target (NYSE: TGT) pushing into groceries, as well as expansion from Aldi and other lower-priced stores.
While the decline is appealing to consumers, for some of the businesses that supply grocery stores, the ongoing drop is a problem. Marketplace cited one cattle farmer saying that the price for his beef cattle is down about 50 percent, and therefore people like him will likely take losses and have a harder time investing in their businesses moving forward.
The change in food costs is striking. Business Insider went to a Wal-Mart store in Richmond, Virginia, and compared recent prices there to prices at the same store in September 2015. One dozen eggs cost 67 percent less, peanut butter was 28 percent cheaper, and ground beef was 8 percent cheaper. Not all prices were down, though. Business Insider saw that canola oil, for instance, had jumped in price considerably.
Whether more products will turn higher in price in the months ahead is unknown, but Marketplace did quote food industry analyst Phil Lempert arguing that the current low prices could be seen as a correction since prices were extraordinarily high just three years ago.
David A. Arnott is the National News Desk Editor with The Business Journals.