Product prices fluctuate a few cents or two, but nothing really comes down in price, right? I don’t usually grocery-shop at Walmart, but I needed toner for the printer. So I decided to grab a bag of Doritos and a jug of milk while I was there. I turned the corner from the snack aisle to face the dairy case head-on. A big, yellow sign brandished the price of $1.05 for milk. From my distance, I assumed that was a half-gallon — quite the bargain. As I got a little closer, I stood in awe before proclaiming, “You have got to be kidding me?”
A whole gallon of milk — skim through whole — was selling for $1.05. My last memory of this price was when I was a youngster in tow behind my mom at the grocery store.
My first thought was the milk had to be expiring soon. Nope, not the case. They all had expirations of more than a week out. My next guess was the store over-ordered. Not sure if that was the case. Eventually, I concluded that supply and demand was finally being reflected at the consumer level. This rarely happens to any degree, but I guess the lousy milk prices over the last two years were finally transcending to some kind of benefit to the consumer. I grabbed two jugs instead of one, and therein, I believe a successful strategy was carried out.
It’s not just milk
According to the final Consumer Price Index for 2016, the overall Food and Beverage Index remained relatively unchanged from the previous year.
The CPI tracks baskets of consumer goods over time using a base year. The biggest bargain this year is livestock-related food products — meats, poultry and dairy — which showed a dramatic 4.2% shift down from the previous year on average. That’s after a 2.2% tumble in 2015. And the Retail Meat Price data indicates retail beef and pork prices were down 7% in December 2016, compared to 2015.
Food, more than ever, appears to be quite the deal compared to other goods. According to the report, consumers are still expected to face rising prices elsewhere in the household with a projected 2% inflation or higher — the same as in 2016. For the index covering the last 12 months ending in December, the largest increases were in energy (5.4%) and medical care (4.1%). In contrast, the food index declined 0.2% over the last 12 months, with eggs taking the biggest hit with a 33.8% decline.
Although food prices appear to be steady or declining in many areas, you have to be careful in your assessment. Food manufacturers have gotten crafty in their packaging in hopes consumers would not notice. That bag of Doritos back in my teenage years used to be a cool 16 ounces. Today, that’s considered the “Party” or “Family” size bag. The standard bag is now 10 ounces. Most canned goods were also 16 ounces back in the big-hair days of the ’80s. Today, pinto beans are 15.5 ounces and stewed tomatoes are 14.5 ounces, according to my pantry. Even sugar is now packaged in 4-pound sacks instead of 5. Did they really think we wouldn’t notice? What’s next — 10 eggs and three quarts of milk?