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Journal Article
Is It Time to Add Food-at-Home Inflation to Measures of Core Inflation?
Since the mid-1970s, the Federal Reserve has used core inflation to examine trends in underlying inflation. Core inflation is considered a more stable measure as it excludes energy and food, historically viewed as the most volatile components of inflation. However, core inflation can be a challenge for central bankers to communicate, as food inflation is highly salient to consumers. We argue that food-at-home inflation has become less volatile over time and could be added to measures of core inflation with few drawbacks.
Journal Article
Some Segments of the Agricultural Economy Are Particularly Sensitive to Changes in the Foreign-Born Farm Labor Supply
For years, many segments of the U.S. agriculture sector have relied on foreign-born and undocumented workers to meet labor demand in farm operations. While farm operators may be able to partly reduce this reliance through investments in machinery and further hiring through the agricultural guest worker visa program, these alternatives would take time to deploy and could substantially increase costs.
Journal Article
Some Segments of the Agricultural Economy Are Particularly Sensitive to Changes in the Foreign-Born Farm Labor Supply
For years, many segments of the U.S. agriculture sector have relied on foreign-born and undocumented workers to meet labor demand in farm operations. While farm operators may be able to partly reduce this reliance through investments in machinery and further hiring through the agricultural guest worker visa program, these alternatives would take time to deploy and could substantially increase costs.
Journal Article
Biofuel Policies Are Likely to Drive Future Demand for U.S. Corn and Soybeans
The supply of U.S. corn and soybeans has grown over the past decade and is projected to increase further in the coming years. In the past, large supplies have been partly absorbed by both export markets and biofuel production. However, going forward, exports are unlikely to grow sufficiently to offset projected supply increases. Instead, demand driven by changes in biofuel policies will be critical to absorbing increased corn and soybean availability and supporting prices for these crops.
Journal Article
High Costs and Uncertainty Will Likely Keep Cattle Inventories Low and Beef Prices Elevated for Some Time
Food-at-home inflation has ticked up in 2026, driven partly by higher beef prices. Beef prices have increased as U.S. consumption of beef has outpaced domestic supply. Despite favorable market signals, supply constraints may keep beef prices elevated for some time. Growing uncertainty in the conditions for raising cattle have prevented ranchers from meaningfully expanding herds to increase domestic supply. Continued uncertainty may stall herd rebuilding, further constraining the beef supply and driving up prices.
Journal Article
Increased Loan Demand and Higher Interest Rates May Benefit Ag Banks
Extreme weather, geopolitical conflicts, supply chain disruptions, and rising interest rates all directly affectU.S. agriculture, which may in turn affect banks that make agricultural loans. Demand for loans from agbanks could rise following events that reduce net farm income or increase banks’ ability to reprice loans,such as supply chain disruptions or higher interest rates. But competition with other banks and nonbankfinancial institutions may offset some of these benefits.
Journal Article
Commodity Prices Have Limited Influence on U.S. Food Inflation
Food prices increased at the fastest pace in more than two decades from July 2021 to July 2022. We show that this increase has not been driven by commodity prices but by an increase in consumer spending on food at home and increases in costs along the supply chain. Our results suggest that food inflation could ease if consumers shift more purchases back to food service establishments and if costs in food processing and marketing abate. Conversely, food inflation could remain high if broader measures of inflation persist.
Journal Article
Tight Labor Markets Have Been a Key Contributor to High Food Inflation
Food inflation remains higher than measures of overall inflation, and labor markets have been tight. We find that processed food products have driven recent increases in grocery prices, and we argue that labor market tightness affects the prices of these labor-intensive products in particular through increases in production and distribution costs. Food inflation at grocery stores could remain elevated if price pressures on the supply side persist and demand for food at home remains strong.
Journal Article
Labor Constraints and Strong Demand Are Driving Robust Food Services Inflation
Although headline inflation has slowed in recent months, inflation for core services has remained elevated since the first half of 2021. Inflation for food services in particular has been significantly higher than inflation for goods and other services. We argue that food services inflation has been elevated by the sector’s fast rebound in expenditures and its high dependency on labor amid labor shortages and elevated labor costs.
Journal Article
Not Bullish: U.S. Cattle Herds Hung Up on Higher Interest Expenses
Cattle inventories declined to historically low levels at the start of 2024. Cattle producers may facechallenges maintaining or restocking herds, as higher interest expenses on cattle and input purchases in2022–23 have constrained profit margins. Although feed costs have decreased slightly, higher costs forfinancing and other operating expenses could continue to put pressure on cattle production andprofitability.