Cost-Price Squeeze Tightens

WASHINGTON - Jan 31/06 - SNS -- The cost-price squeeze tightened in the United States in January, with U.S. farmers paid 3% less for their agricultural output than in December, while the cost of farming rose 2%, according to the latest USDA data.

The preliminary All Farm Products Index of Prices Received by Farmers in January, at 112, based on 1990-92=100, decreased 3 points (2.6%) from December but 0.9% above the January 2005 index.

The Crop Index is down 3 points (2.7%) and the Livestock Index also decreased 3 points (2.5%). Producers received lower commodity prices for lettuce, turkeys, eggs, and hogs. Higher prices were received for cattle, oranges, corn, and cotton.

The overall index is also affected by the seasonal change based on a 3-year average mix of commodities a producer sells. Increased average marketings of cattle, soybeans, corn, and strawberries offset decreased marketings of grapes, tomatoes, dairy, and cotton.

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