BUSINESS OF FARMING
INFLATION HITTING CONSUMERS, PRODUCERS IN 2022 LARGE IMPACT ON ALABAMA HOUSEHOLDS AND FARMS
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B Y W E N D I A M S AWA D G O
ising prices have been a challenge to all of us. Higher gas prices to start the year, along with the increased food prices that began in 2021, have constrained our families’ budgets. One measure of inflation is the Consumer Price Index (CPI), which is released by the Bureau of Labor Statistics and measures changes in prices paid by consumers for goods and services. The CPI for all items increased by 0.8% between January and February 2022, marking a 7.9% increase over the past year. This was in part driven by high-profile increases in food prices by 7.9% and energy by 25.6%. These price increases have largely been due to the prolonged supply-chain disruptions due to the COVID-19 pandemic and labor issues. The high prices affecting our
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Cooperative Farming News
household budgets are also having a large impact on the Alabama farms in 2022. Similar to the CPI, the USDA National Agricultural Statistic Service computes the average price that producers are receiving and paying for various items nationwide. The past year has seen rising agricultural prices, for better or worse, as shown in figure 1. On the one hand, prices received by producers have increased by 24.3% over the past year. Prices for several commodities, such as cotton, corn, soybeans, and wheat, are expected to reach their highest levels in about a decade, and cow-calf prices are at their highest point since 2016. On the other hand, producers have been squeezed by input costs and are paying 11.6% more for inputs than they were a year ago.
