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The USDA also increased an estimate for corn stockpiles at the end of this August to 851 million bushels from 801 million bushels, noting that some of this year's crop may be ready for use earlier than normal because of a fast start to the planting season.
A mild spring and plenty of moisture allowed farmers to get an early start on planting this year. They are expected to plant 91.9 million acres in corn, the most since 1937.
The USDA estimates a 2012-2013 average corn cash price of about $4.60. That's about 40 cents per bushel less than the $5 estimate the government released in February. A hot dry summer with little rain could reduce yields, lower projected corn stockpiles and boost prices, but most farmers say they prefer a healthy crop.
The forecast is the first at the beginning of the growing season. Many things could affect the outcome. If the predictions become reality, corn prices will fall, and that could mean lower supermarket prices for products that use corn, such as cereal and soft drinks sweetened with corn syrup. Beef and pork prices could fall, too, because producers would pay less to feed their animals.
The government has forecast an increase of 2.5% to 3.5% in overall food prices for 2012.
Sources: www.denverpost.com, www.news.yahoo.com