Food Prices Rising Sharply

Producers received higher prices for lettuce, cattle and corn, and lower prices for milk, eggs and wheat. Costs rose for rent, nitrogen fertilizer and other services, while falling for diesel fuel, interest and mixed fertilizer.

Food prices paid by consumers will be going up, due in part to continued drought conditions in some of the country’s most productive farmland and due in part rising costs. The rising farm price index does not predict that inflation will zoom up, but it is one indicator that consumers will be squeezed again to decide whether to buy something to eat or that new electronic gizmo. Food usually wins, and the effect on the economy is (usually temporarily) not good.