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DES MOINES -- Consumers could see some relief from higher food prices by late fall, if the latest government crop forecast holds up.
The U.S. Agriculture Department predicted Thursday that corn production will total a record 14.8 billion bushels. That compares with 12.4 billion bushels a year ago, and it's 11 percent higher than the previous record crop in 2009. The government also predicts a record yield of 166 bushels an acre.
"We're looking at the largest corn crop this country has ever produced and larger than the previous record by over 1 1/2 billion bushels," said Chad Hart, grain market specialist and economics professor at Iowa State University.
The Ag Department 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.
About three-fourths of the U.S. crop is in the ground this year, compared with about half at this time in a normal year, Mr. Hart said.
The department estimates a 2012-2013 average corn cash price of about $4.60 a bushel, about 40 cents a bushel lower than the $5 estimate released in February.
Lower corn prices mean that farmers raising chickens, hogs, and cattle save money on feed, and that can be passed on in lower meat prices in grocery store.s
For processed foods such as corn flakes, the price impact for consumers is less. About 20 cents of the retail food dollar goes to the cost of the food itself, Mr. Hart said.
That means corn prices can move a lot at the farm level, but it still has a relatively small impact on food prices because 80 percent of the cost in the food is packaging, processing, marketing, transportation, and other factors.
The government has forecast an increase in the range of 2.5 percent to 3.5 percent in overall food prices for 2012.