food costs

Falling Food Prices Hurt Farm Belt

Dan General

falling food price-check from supermarket
The U.S. is on pace to continue the longest stretch of falling food prices in over 50 years. While the lower prices are a boon to shoppers, it’s putting serious pressure on the farm economy. The Wall Street Journal says reasons behind the lower prices start with excess production in several ag sectors, including dairy, meats, grains, and other staples. The trend is also being fueled by lower overseas demand from China and elsewhere due to a stronger dollar. Around the country, the price for a gallon of milk fell 11 percent from last year to $3.06 in July. The price for a dozen eggs fell 40 percent to $1.55 in the same period. As farmers get less money for products like raw milk, cheese, and cattle, they’re slashing spending. In turn, that creates a ripple effect to companies like John Deere, who are cutting production due to the farming slump. Economists feels the price slump could last at least through the end of the year. The current food price slump could beat the nine months of declines seen back in 2009-2010. Incidentally, the falling price of food is taking its toll on the nation’s grocery stores, which have thin profit margins to begin with.

From the National Association of Farm Broadcasting news service.