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Tuesday, May 10, 2016

ERS: Little Correlation Between Field Crop and Food Prices

U.S. ag commodity prices, particularly field crops, are far more volatile than restaurant and grocery store food prices, according to the Economic Research Service (ERS).
The prices for major field crops, corn, wheat and soybeans, fluctuated widely from year to year, between 1992 and 2015. Prices for those crops fell as much as 26.2% in 2013, and rose as much as 38% in 1995 and 2007.
Food price inflation averaged just 2.5% year over year during the 1992 to 2015 period. Food prices not only reflect the raw material costs involved in production, such as those for field crops, but also include processing, marketing and retailing costs. As a result, food prices are more stable over time than prices seen for the field crops themselves.
In 2014, the farmgate price of all food commodities, including crops and livestock, was 14.5 cents of each consumer dollar spent on food and beverages