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Prices of Raw Farm Goods Make First Gain Since July

November 29, 1986|Associated Press

WASHINGTON — Prices that farmers get for raw products rose 3.3% in November, the first increase in the monthly index since July, the Agriculture Department said Friday.

But the increase, based on preliminary figures, still left the overall farm commodity price index 1.6% below the year-ago level.

The department's Agricultural Statistics Board said higher prices for oranges, lettuce, cotton, grains, eggs and milk led the advance in the November index. However, lower prices for broilers, grapefruit, strawberries and apples offset part of the increase for the other commodities.

Prices paid by farmers to meet expenses were not shown for November. The "prices paid" index was reported in October to be down 0.6% from July. The index is revised only once every three months because of a cutback in funds. The next revision will be in January.

Up 6.2% From October

"Crop prices generally increased from a month earlier," the report said. "Food and feed grain prices increased from a month earlier, but all were well below a year ago, except oats. Most commercial vegetable prices were above last year's. Hog prices continued to decline but were still well above a year earlier. Steer and heifer prices were at the highest level since December, 1985."

According to the preliminary November figures, based mostly on mid-month averages, prices of crops rose an average of 6.2% from October but were down 9.6% from November, 1985.

Prices of commercial vegetables at the farm were up 15% from October and 17% higher than a year earlier, due mainly to a rise in prices for lettuce and tomatoes.

Cotton prices rose 17% from October but still lagged the year-earlier average by 2.2%.

Oil-bearing crops, which include soybeans, were up 5.6% from October, matching the year-ago average.

The all-fruit index was up 4.9% during the month and was 1.1% above a year ago.

Prices for feed grain and hay averaged 3.9% higher than in October but still were down 28% from November, 1985.

The price index for livestock and livestock products was unchanged from October.

Huge Wheat, Corn Crops

Generally, the depressed price situation for most grains reflects the huge wheat and corn crops harvested by farmers in recent years and the failure of exports to drain off the rising supply.

Moreover, using the authority given it by Congress in last year's Food Security Act, the Reagan Administration has opted for reducing government price supports on the major crops in hopes of making U.S. wheat, corn and other commodities more affordable to foreign buyers.

Net farm income is forecast by USDA in the range of $26 billion to $30 billion this year, down from $30.5 billion in calendar 1985.

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