Wheat Prices Help Escalate Farm Index
Sharply higher wheat prices and the best hog prices since early 1994 combined to give farmers a 2 percent boost in the July index of prices they received, the Agriculture Department reported Monday.
The increase was the first in five months.
Producers received higher prices for corn and broilers as well. However, prices fell for cattle, cantaloupes, lettuce and tomatoes. Cattle producers, because of expanding herds, received their lowest prices since March 1987.
The index rose 5 percent from July 1994. Higher prices for wheat, corn, hogs and cattle offset lower prices for cattle, broilers and calves.
Wheat rose 39 cents a bushel to $4.24 from June to July because of strong export demand and lower expected production in the United States, Canada and China. A year ago, wheat was $3.04.
Corn rose 16 cents to command $2.67 a bushel because of hot, dry conditions in the Midwest and lower projected supplies. Last year, corn was $2.29 amid expectations of a record harvest.
Hogs rose to 46.3 cents a pound, up from 42.3 cents in June and 42.2 cents a year ago, for the best prices since February 1994.
The department noted that seasonally tighter hog supplies and increasing competition between domestic retailers and foreign buyers likely contributed to the higher prices.
Broilers rose to 34.5 cents a pound, compared with 32.8 cents in June and 36.4 cents in July 1994. The department noted smaller increases in production and good movement of chickens through fastfood outlets.
Beef cattle prices fell to 59.7 cents a pound, compared with 60.9 cents in June and 62.9 cents in July 1994. The department noted that the total number of cattle on hand reached 114.3 million head on July 1, some 2 percent above a year ago.
The department expects losses for higher-cost producers this fall and for most producers next year. The surpluses should mean lower store prices for beef, however.
Lettuce prices approached their seasonal low points, while tomatoes fell after a brief spike caused by short supplies in June.
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