Several factors influence low food price inflation |

Several factors influence low food price inflation

Several factors have led to a five-year decline in food inflation, according to a report released this week by the Agriculture Department’s Economic Research Service.

“We explore some concurrent factors that resulted in lower food prices: increases in farm- and wholesale-level production and changing input prices for other factors of production; exchange rate variations; marketing costs; market power in food retailing; and increased competition from food services,” the ERS economists wrote.

“While there are many reasons for the observed food price deflation, we focus on these factors because they are likely to have had the biggest impact on food prices in 2016 and 2017 based on food industry reports.”

–The Hagstrom Report

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