By Robert Pore
robert.pore@theindependent.com

The survey shows that the total cost of 16 basic grocery items in the first quarter of 2008 was $45.03, up about 8 percent, or $3.42, from the fourth quarter of 2007.

The Nebraska AAA Daily Fuel Gauge on Wednesday showed that the average price of regular gasoline was $3.20 per gallon. A year ago, it was $2.65 per gallon.

Oil prices soared to $107 per barrel on Thursday on news of the bombing of a key Iraqi pipeline, along with a weakening U.S. dollar and lower U.S. fuel inventories.

According to the American Farm Bureau Federation, of the 16 items surveyed, 11 increased, four decreased and one stayed the same in average price compared to the 2007 fourth-quarter survey. Compared to one year ago, the overall cost for the market basket items showed an increase of about 9 percent.

The largest retail price increase was for a 5-pound bag of flour, which was up 69 cents to $2.39. Wheat prices are running at $10.15 per bushel.

Other items that increased in price were cheddar cheese, up 61 cents to $4.71 per pound; corn oil, up 58 cents to $3.01 per 32-ounce bottle; a dozen large eggs, up 55 cents to $2.16; vegetable oil, up 38 cents to $2.63 per 32-ounce bottle; mayonnaise, up 22 cents to $3.14 per 32-ounce jar; russet potatoes, up 18 cents to $2.47 for a 5-pound bag; a 20-ounce loaf of white bread, up 16 cents to $1.78; apples, up 13 cents to $1.40 per pound; whole fryer chickens, up 9 cents to $1.37 per pound; and ground chuck, up 4 cents to $2.73 per pound.

Bacon was the only item in the survey that stayed the same in price, at $3.35 per pound.

Hog prices have been down more than 14 percent this year compared to a year ago.

Items that decreased in price were whole milk, down 10 cents to $3.81 per gallon; pork chops, down 8 cents to $3.31 per pound; a 9-ounce box of toasted oat cereal, down 8 cents to $2.97; and sirloin tip roast, down 5 cents to $3.80 per pound.

Jim Sartwelle, American Farm Bureau Federation economist, said more than a third of the increased cost reported this quarter is attributed to the two oil products, corn and vegetable oil; and mayonnaise, which is oil-based.

"Continued strength in the wheat and cheese markets also contributed to the overall price increase for the basket of items," Sartwelle said.

Sartwelle said it's important to note the contribution of runaway energy prices to the retail cost of food.

"Transportation, processing and packaging all cost significantly more now than in prior years," he said.

With supermarkets filled with food that came in on trucks fueled by diesel, diesel prices averaged $3.97 per gallon, up from $2.78 per gallon a year ago, according to Nebraska AAA.

Renewable Fuels Association President Bob Dinneen said there have been increasing attacks by the food industry that ethanol is the primary cause of rising commodity and food costs.

"To put the blame for rising commodity, food and energy prices solely at the feet of the American ethanol industry is misleading and diversionary," Dinneen said. "This kind of overheated, Chicken Little rhetoric is meant to distort the truth and deliberately misinform the American public.

"Fortunately, the American people see through these smokescreens and understand that this nation must break its addiction to oil," he said. "The consequences of failing to do so, like record oil prices well in excess of $100 barrel, are too great. Biofuels like ethanol represent the beginning of that long journey."

But even with historically high crop prices, farmers' share of the food dollar continued to decline, Sartwelle said.

"In the mid-1970s, farmers received about one-third of consumer retail food expenditures on average," he said. "That figure has decreased steadily over time and is now just 22 percent, according to Agriculture Department statistics."

Using that percentage across the board, Sartwelle said, the farmer's share of this quarter's $45.03 market basket total would be $9.90.