Improved Financial Picture on U.S. Farms

WASHINGTON - Aug 31/06 - SNS -- The financial situation facing farmers in the United States improved in August, with prices received for agricultural production rising, while the cost of farming was unchanged.

The USDA's August Index of Prices Paid for Commodities and Services, Interest, Taxes, and Farm Wage Rates (PPITW) is 148% of the 1990-92 average. The index is unchanged from July but 7 points (5.0%) above August 2005.

Higher prices for diesel fuel, LP gas, complete feeds, and feed supplements offset lower prices in August for nitrogen fertilizers, feed grains, self-propelled machinery, and feed concentrates.

Meanwhile, the preliminary All Farm Products Index of Prices Received by Farmers in August, at 120%, based on 1990-92=100, increased 3 points (2.6%) from July. The Crop Index is up 3 points (2.4%) and the Livestock Index increased 5 points (4.5%).

Producers received higher commodity prices for lettuce, broilers, tomatoes, and eggs. Lower prices were received for corn, soybeans, sorghum grain, and potatoes. The overall index is also affected by the seasonal change based on a 3-year average mix of commodities producers sell. Increased average marketings of cattle, grapes, calves, and sweet corn offset decreased marketings of wheat, hay, broilers, and canteloupe.

Preliminary All Farm Products Index is up 4 points (3.4%) from August 2005. The Food Commodities Index, at 124, increased 6 points (5.1%) from last month and increased 5 points (4.2%) from August 2005.

The August All Farm Products Index is 120% of its 1990-92 base, up 2.6% from the July index and 3.4% above the August 2005 index.

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