While the Associated Press had a positive outlook on corn, pointing out that the crop prices fell on Friday with favorable weather in the Midwest, the Times Online UK Edition reported that experts are predicting the US will produce 15% less grain than last year due to the flooding. Coupled with a greater demand for corn for ethanol, and an increased cost in soybeans, some farmers have begun selling off breeding animals to offset costs. More from the Times article:
Tyson Foods, the giant Arkansas-based meat producer, has predicted that retail chicken prices will have to jump by double-digit percentages in 2009 for poultry processors to recoup their feeding costs. The cost of food is increasing at its fastest pace in 18 years.
The Chicago Sun-Times echoed this sentiment by reporting:
Pork prices could be up as much as 30 percent next year because of production cutbacks, said John Lawrence, an economist at Iowa State University. Prices of beef and poultry products are likely to be at least 10 percent higher by the end of this year, he said.
While these are just estimates, the USDA plans on releasing their official acreage report on June 30th (a detailed press release can be found here). They are quick to point out, however, that the report will not include the most recently impacted areas of the Midwest Floods. They will conduct more research in July, and an updated report will be available in the August 12th Crop Production Report.
Further Reading:
Bloomberg on the possibility of rising wheat prices.
