The U.S. Department of Agriculture (USDA) released its preliminary report on September farm prices on Friday afternoon. The September all-products price index dropped by 4 points (2.1%) to 185 month-over-month, with the crop index down 3.7% and the livestock index down 0.6%. The preliminary all-products index is down 5.1% year-over-year. The index uses prices from 1990-1992 as its base value (100). The monthly declines are smaller than the July to August declines.
The USDA noted that increased sales of cattle, milk, and calves offset lower sales of wheat, corn, and hogs.
Farm costs, measured by the prices paid index fell 1.4% month-over-month to 213, and that's 1.8% lower than September of 2012. Lower prices for nitrogen fertilizer, feed grains, and other fertilizers offset higher prices for feeder cattle, diesel fuel, and LP gas.
Prices received by farmers rose the most for fruits and nuts (up 8.3% from August) and dairy products (up 2%). Feed grains and hay, commercial vegetables, and potatoes and dry beans were all lower month-over-month. Compared with September 2012, commercial vegetables prices are a 9.3% lower than a year ago.
Meat prices are up 7.1% year-over-year, with hogs up about 24% and beef cattle up about 1.6%. Live cattle prices have been on a steep climb since mid-month as U.S. supplies continue to slide while producers build back their herds. Retail beef prices are expected to stay high for the next month at least.
Here is how some agriculture-related ETFs are performing today:
The Market Vectors Agribusiness ETF (NYSEMKT: MOO) was trading down about 1% before the USDA report was released. About half an hour before markets close today shares are down about 1% at $51.64 in a 52-week range of $48.75 to $56.55.
The PowerShares DB Agriculture fund (NYSEMKT: DBA) was trading down about 0.2% before the report, and remained flat at $25.44, in a 52-week range of $24.36 to $29.64.
The Teucrium Corn Fund (NYSEMKT: CORN) traded down about 0.4% and fell to down 0.5% at $34.30 in a 52-week range of $33.95 to $49.34.
The Teucrium Wheat Fund (NYSEMKT: WEAT) was trading flat before the report, and rose to $16.92, up 0.5% in a 52-week range of $24.36 to $29.64.