WASHINGTON—Americans got some relief at the supermarket over the holidays with grocery prices down 1 percent in three months, but the new year is not expected to bring steep price cuts, according to a survey by the American Farm Bureau Federation in October.
The survey of 133 volunteer shoppers in 37 states found the cost of 16 basic grocery items to be $48.19, down 49 cents from August but up 7 percent or $3.16 from the beginning of 2008.
"Despite the recent collapse in oil prices and steep declines in farm commodity prices, food prices have not yet declined significantly and may not for quite some time," Farm Bureau economist Jim Sartwelle said. "Sticky prices, once a somewhat obscure economic concept to most food consumers, are the new reality as we move into 2009."
"Sticky" is a term used in economics to describe a situation in which variables, such as wages or prices for goods, are resistant to change despite external forces.
Sartwelle said grocery prices could moderate this year if economic turmoil continues globally, lowering demand for U.S. commodities. The U.S. Agriculture Department recently lowered its food inflation forecast for 2009 by 0.5 percentage point to 4 percent. USDA estimates food prices rose by 5.5 percent in 2008, the largest annual increase since 1990.