Prices for producers fell for the third consecutive month and for the fourth month this year. The report was issued a day after minutes of the latest Federal Reserve Open Market Committee policy meeting said some members of the committee had "cited some risk of deflation," which stalls the economy as consumers wait to make purchases with prices headed lower.

The meeting minutes said "a few participants" were concerned deflation would drag down the economy, while "other participants ... thought that inflation was unlikely to fall appreciably further given the stability of inflation expectations ... and very accommodative monetary policy."

For producers, core prices in June -- prices excluding food and energy costs -- rose 0.1 percent, while energy prices dropped 0.5 percent and food prices fell 2.2 percent.

More than 80 percent of June's total price decline was attributed to falling food prices, the department said.

Prices for finished food dropped for the third consecutive month after six months of gains. In June, food price declines were led by costs of fresh and dry vegetables, which dropped 21.8 percent.

Energy costs, by contrast, fell 0.5 percent, led by lower gasoline prices, which dropped 1.6 percent.

Copyright 2010 United Press International.