ST. LOUIS — U.S. food prices might 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 U.S. Agriculture Department said last week. That's 9 percent larger than the average annual corn crop during the past decade. The only crop bigger in the past 67 years was planted in 2007.
Many analysts had worried that wet weather this 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.
More expensive grain has led to food price increases this year. That ultimately could make everything from beef to cereal to soft drinks more expensive at the supermarket. For all of 2011, the USDA predicts food prices will rise 3 percent to 4 percent.
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A huge harvest in August could slow food inflation. It typically takes six months for changes in commodity prices to affect retail food prices in the United States. 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, all of us were proven wrong today," said Jason Ward, an analyst with Northstar Commodity in Minneapolis.
Industry traders had expected 90.8 million acres of corn had been planted. Knowing that far more corn is in the pipeline probably will pull down grain prices dramatically this summer, Ward said.
But a bigger crop doesn't guarantee lower food prices. A drought or flood could limit the size of the harvested crop. Ward said many of the acres planted this spring were on marginal land that won't yield much grain. Many farmers planted during wet weather just because they knew they could get the crops insured.
"They have no intention of harvesting them because they were planted in complete mud," Ward said.