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December Agriculture Markets Review

December 27, 2021

Strong inflationary pressures a cause of concern for farmers

November’s Purdue University Ag Barometer index fell to 116, the lowest level since May 2020. Feelings about current conditions and future expectations both dropped, with inflationary pressures on input prices being the primary concern.

Chart showing November’s Purdue University Ag Barometer index fell to 116, the lowest level since May 2020

Ag News Highlights

Food inflation climbs further

Consumer prices for food have been following the lead of skyrocketing grower costs (farm input costs are detailed on page 2 of full report). The food component of the consumer price index (CPI) has risen by at least 0.4 percent month-over month for eight straight months, with all six grocery store food group indices climbing in each of the last three months. The strongest
recent gains have been in the cereals and bakery products, meats, poultry, fish, and eggs, and other food at home categories. Growth over the past 12 months in the various food
categories are as follows:

  • Food: 6.8%
  • Food at home: 6.1%
  • Cereals and bakery products: 4.6%
  • Meats, poultry, fish, and eggs: 12.8%
  • Dairy and related products: 1.6%
  • Fruits and vegetables: 4.0%
  • Nonalcoholic beverages and beverage materials: 5.3%
  • Other food at home: 5.7%
  • Food away from home: 5.8%

AFBF asks for exemptions to travel ban

In conjunction with more than 50 other agriculture groups, the American Farm Bureau Federation sent a letter on December 13 to the Biden administration asking for exemptions for H-2A workers from the recent ban on travel to the U.S. from several countries. The ban is aimed at preventing the spread of the omicron variant and includes South Africa, where many H-2A workers travel from in late winter and early spring. As with many industries, farms are already dealing with a labor shortage; the travel ban would further threaten productivity in agriculture.

CA food industry fights law limiting pork sales

California food industry leaders have filed a lawsuit to block Proposition 12, which was approved by California voters in November 2018. The law bans the sale of pork from hogs born to sows housed in pens raised anywhere in the country that do not meet California’s prescribed sow housing standards, and prohibits the use of breeding stalls, which let sows recover after delivering and nursing piglets.