The Department of Agriculture produces a monthly index of agricultural prices, reflecting the prices received by farmers for sales including crops and livestock. The farm price index is a good indicator of future inflation in the overall economy, since food prices are a major component in the consumer price index. In its most recent release, the Department of Agriculture stated that due to sequester, it is suspending a number of Statistics Service is suspending a number of statistical surveys and reports for the remainder of the fiscal year that will impact the Agricultural Prices report including: Non-citrus fruit, tree nuts, vegetables, and milk cow replacement prices.
Food prices have been increasing faster than inflation for some time. In May, the index was up 1 percent over April’s figure. The crop index was down 0.5 percent but the livestock index increased 3.7 percent driven by higher producer prices for eggs, hogs and broilers. Prices were lower for corn and wheat. Overall, the All Farm Products Index is up 7.8 percent over the past year, with food commodities up 7.1 percent.The farm price report is a substantial document providing a wealth of detailed information about agricultural prices across the country. Prices at the commodity level, the state level and the sub-product level are all available, for lengthy time series, and reflect on the high level of Federal involvement in the nation’s agricultural system. I personally find it fascinating that I can find out more about the amount and price of Kiwi fruit produced in Mississippi than I can about almost any other economic activity. That said, the Farm Price report is an important document for anyone involved in the food industry as it provides early warning about commodity prices, input prices and overall food prices. This can help influence investment, capacity utilization and hiring decisions in a wide range of production, distribution and retail sectors.