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Lower Price Supports May Lower Farm Prices, Help Level Off Food Inflation

March 26, 1987

WASHINGTON (AP) _ Lower government price supports for major farm commodities may lower farm prices and help level off consumer food cost increases into the 1990s, according to Agriculture Department economists.

Rising demand and a growing population are expected to boost food prices by an average of about 3 perent a year, about the current rate of increase, studies show.

Ralph Parlett of the department’s Economic Research Service, one of the authors, said retail food prices have risen an annual rate of about 3 percent for the last five years. This year’s increase is expected to be in that ballpark, in the range of 2 percent to 4 percent.

Parlett said Wednesday in a telephone interview that he expects the same range of increase to last ″out through the end of the decade″ and into the 1990s.

Parlett noted that inflation during the ’70s sent food prices into double- digit annual readings four times. Overall, in 1970-79 food prices rose an average of slightly more than 8 percent a year, he said.

Beginning in 1980, the trend was lower, declining to a 16-year low of 2.1 percent in 1983. Food prices rose 3.8 percent in 1984, 2.3 percent in 1985, and 3.2 percent in 1986.

In a report to be included in a forthcoming quarterly issue of the agency’s National Food Review, Parlett and a colleague, Kathryn L. Lipton, said the lower trend to annual increases of 3 percent ″would primarily be due to greater consumer demand and higher processing and marketing costs.″

The report added: ″Changing lifestyles and rising per capita income also have an effect. Food prices rise as consumers reach more often for the value- added foods, such as frozen food or pre-cooked entrees that are easy and quick to prepare. In addition, the growing trend toward eating out contributes to higher food expenses.″

Little of the future rise in food prices will result from higher prices at the farm, the report said. Scientific and technological advances will ″help hold down the farm cost of food″ in the coming years.

Also, Parlett pointed out in a related article in the same publication that sharp cuts in price supports under the Food Security Act of 1985 will reduce farm prices for many commodities. Price support affect the price of commodities on the market.

Paul C. Westcott, another economist in the agency, said consumers may eventually enjoy some savings at meat counters as a result of lower feed costs for livestock producers. But the savings won’t come quickly.

″It may take over a year before prices for some meats fall below what they would have been without the reduced feed costs,″ Westcott said.

However, in the long run, lower prices for corn and other feed grains could reduce retail meat prices by 3 percent to 5 percent, he said.

″As prices of feeds such as corn and sorghum fall, meat producers are likely to take advantage of the lower costs and expand production,″ Westcott said.


WASHINGTON (AP) - The 17-year cicada, a red-eyed insect nearly two inches long, is about to make its appearance, says the Agriculture Department.

Mistakenly called 17-year locusts, the insects are Brood X (10) periodical cicadas or Magicicada septendicum, which last appeared in the Northeast in 1970.

″These cicadas won’t wipe out our crops, and they don’t attack people,″ said Douglass R. Miller, an entomologist with the department’s Agricultural Research Service.

He added: ″Besides making a lot of noise, about the only effect they’ll have in most places is to prune the tips of branches on some deciduous trees and shrubs. It’s their cousins - the likes of aphids, scale insects and greenbugs - that damage crops on a broad regional and national scale. Locusts also damage crops, but locusts really are certain species of grasshoppers, not cicadas.″

Nevertheless, Miller said, damage by the 17-year periodicals can be severe in some areas, particularly to oaks, dogwoods and fruit trees.

For 17 years, immature Brood X cicadas, called nymphs, have been underground, feeding slowly on plant roots. In May and June, they will emerge from the soil in the northeastern quarter of the United States and adjoining parts of Canada. The farther north, the later they emerge.

A different brood of 17-year periodical cicadas appears each year. The broods are numbered I through XVII.

Miller said Brood X is by far the largest and most extensive brood and that he expects this year’s appearance to be the ″most dramatic and visible swarm″ since the brood’s last appearance in 1970.

After the immature cicadas emerge from the soil, they climb the nearest tree or post and shed their skins, mating within a week. About two weeks later, the females lay their eggs, puncturing small branches to do so. The adults die a few weeks after that, ending the swarm.

The eggs hatch in six to eight weeks, and the cicada nymphs drop or crawl to the ground, where they enter the soil ″to begin the long, slow feast that will last until they mature″ in the year 2004, Miller said. Because the nymphs feed slowly, most trees survive.


WASHINGTON (AP) - Farmers received 3.5 cents for the wheat in a one-pound loaf of white bread selling for 56 cents in 1986, according to Agriculture Department economists.

That is down 0.6 cent from 1985, when consumers paid 55 cents for the same loaf, a report showed Wednesday. The farm value of other ingredients, mainly shortening and sweeteners, was put at 0.5 cent in 1986, down 0.2 cent from 1985.

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