USA Today reports that consumers are finding their grocery bills falling while farmers are seeing income decline. USDA forecasts indicate that farm sector income will fall by 38% in 2009 - the worst annual percentage drop in 26 years.
According to Richard Volpe, a researcher in the Department of Agricultural and Resource Economics at UC-Davis, some of the declines in retail prices can be attirbuted to the recession as supermarkets compete for customers.
Consumer prices for pork and dairy are down, but not nearly as much as the drop in prices received by farmers. The average retail price for a gallon of milk has fallen by about $1.00 in one year, but dairy farmers saw the prices they receive drop to $11.80 from $18.40 a year before.
Farm input prices are declining as well, but not as much as income. USDA reports that the reduction in gross income will far exceed the reduction in production costs, leaving all net measures of income and output below the record or near record levels established in 2008.
To view USDA's 2009 Farm Income Forecast, click here.
To read USA Today's story, click here.
Posted: 09/22/09
