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Abstract

Food prices, as measured by the Consumer Price Index, increased 4.1 percent in 1988, the same increase as in 1987. But prices rose at a much higher rate in the second half of 1988 than in the first half due to the severe drought and other market factors. The prices farmers received for commodities, as measured by the farm value of USDA's market basket of foods, rose 3.6 percent. Farm value of foods had dropped in 2 of the previous 3 years. The farm value share of the food dollar spent in grocery stores was 30 percent, unchanged from 1987. The farm-to-retail price spread of USDA's market basket of foods rose 4.7 percent, partly reflecting higher prices of inputs used in handling, processing, and retailing foods.

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