US wholesale prices rose 0.3 percent in July

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WASHINGTON — U.S. wholesale prices increased modestly in July from June. But food prices rose sharply, led by the biggest increase in corn prices in nearly six years.

The Labor Department says the producer price index, which measures price changes before they reach the consumer, increased a seasonally adjusted 0.3 percent last month. That followed a 0.1 percent gain in June.

Food prices rose 0.5 percent, a sign that the severe drought in the Midwest is driving costs higher. The dry weather has harmed a range of crops, most notably corn and soybeans.

Corn prices jumped 34.5 percent in July, the largest gain since Oct. 2006. Pork, beef and veal prices also increased sharply. Corn is a key ingredient in animal feed.

Excluding food and gas costs, wholesale prices rose 0.4 percent.

Source: The Associated Press