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 U.S. 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.
Kansas farmers planted 5.1 million acres of corn, the most since 1936, the USDA said. The USDA forecasts that the amount of corn acres making it through to harvest will be 4.8 million, which would the most acres since 1933.
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.
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 in June.
More expensive grain has led to food price increases this year. That could ultimately make groceries more expensive. For all of 2011, the USDA predicts food prices will rise 3 to 4 percent.
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, all of us 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 likely pull down grain prices dramatically this summer, Ward said.
Farmers chose to plant corn at the expense of this year's soybean crop. They used only 75.2 million acres of soybeans, about 3 percent less than last year. In Kansas, farmers planted an estimated at 3.9 million acres of soybeans and are forecast to harvest 3.85 million. Both are down 9 percent from last year but are still the second highest on record.
Raised expectations for this fall's corn crop also helped lower soybean prices in trading Thursday. Soybeans fell 23 cents to $13 a bushel. , the maximum amount allowed by futures exchanges.
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.
The nearly completed Kansas wheat harvest was carried out on the smallest amount of acres since 1957. The USDA forecasts wheat on 7.8 million acres, up 1 percent from the previous forecast but 3 percent below a year ago.