Friday, 11 November 2011

Smaller corn harvest could keep food prices high

(AP) ? The government slightly reduced its estimate for next year's corn supply, a move that could keep food prices high for most consumers.

The Department of Agriculture estimates that a smaller harvest will leave farmers with 843 million bushels of corn at the end of next summer. That's lower than last month's forecast of 866 million bushels. Wednesday's crop forecast is the first since farmers harvested most of their corn crop last month.

Tight supplies next year will likely increase corn prices, which hit record levels in June on fears of a shortage.

Corn prices affect broader food inflation because it is used in everything from animal feed to cereal to soft drinks. It takes about six months for corn prices to trickle down to products at the grocery store.

Associated Press

Source: http://hosted2.ap.org/APDEFAULT/f70471f764144b2fab526d39972d37b3/Article_2011-11-09-US-Crop-Size/id-e4339d46637e40bc879ce0f1471d669f

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