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Larger food supplies and an easing of inflationary forces greatly slowed the rise in food prices in 1976. The retail cost of a market basket of farm foods averaged only 1 percent higher than in 1975. All of the increase was accounted for by an increase of 5 percent in the farm-retail price spread, representing the charges for processing and distribution. The 1976 increase in the marketing spread was the smallest in several years, due in part to a slower rise in the costs of some marketing inputs, such as food containers. Returns to farmers for food products declined about 4 percent in 1976, mainly due to lower livestock prices. Farmers received an average of 40 cents of each dollar spent by consumers for farm foods in 1976--2 cents less than in 1975.


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