Economists had expected a drop of 0.2 percent for the prices producers receive for finished goods. The decline, which comes after a 0.7 percent gain in February, was led by a 3.4 percent drop in energy prices.
Prices for finished food items rose 0.8 percent in the month.
For energy, it was the sharpest month-to-month decline in three years. For all goods, the decline was unmatched since May of 2012.
Core prices, which exclude food and energy, were higher, up 0.2 percent.
Prices producers received were up 1.1 percent on an annual basis, down from 1.7 percent in February and the lowest annual rate since June.
Prices for intermediate goods dropped 0.9 percent while prices for crude goods -- raw materials -- fell 2.5 percent.