ST. LOUIS — U.S. food prices may ease later this year now that farmers have planted the second-largest corn crop in nearly seven decades.
The size of this year’s corn crop will be 92.3 million acres, the Agriculture Department said Thursday. That’s 9 percent larger than the average annual corn crop over the past decade. The only crop bigger in the past 67 years was planted in 2007.
Many analysts had worried that wet weather this past spring would cut the number of corn acres. But record-high prices are encouraging farmers to use more acres for corn, and less for soybeans and wheat.
A greater crop estimate drove corn futures down 30 cents to close at nearly $6.21 a bushel. That’s the maximum price change allowed by futures exchanges. Corn rose to a record high of $7.99 a bushel earlier in June.
More expensive grain has led to food-price increases this year. That could ultimately make everything from beef to cereal to soft drinks more expensive at the supermarket. A huge harvest in August could ultimately slow food inflation. It typically takes six months for changes in commodity prices to affect retail food prices in the U.S.
Analysts say consumers could see some relief at the supermarket by early 2012.
“All of us who perceived tighter (corn) supplies up to this point . . . were proven wrong today,” said Jason Ward, an analyst with Northstar Commodity in Minneapolis.
Industry traders had expected just 90.8 million acres of corn had been planted. Knowing that far more corn is in the pipeline will probably pull down grain prices dramatically this summer, Ward said.
