GoodFuels

USDA: More corn than expected

Farmers planted one million more acres of corn than expected in March, according to a USDA report released yesterday.  This is great news for corn prices and the cost of many other crops.  Corn and wheat prices fell yesterday when the news broke and there will be plenty of corn to go around for the 2008 harvest.

Farmers had expected to plant fewer crops than last year due to the flooding in the Midwest, but rallied despite poor predictions.

The acreage is the second-highest since 1944 after plantings last year surged to 93.6 million acres.

The AP reported that the price drop may have a small impact on the price of food, but that energy prices are still the primary reason for high food prices.

Dan Cekander, an analyst for Chicago-based Newedge USA, said grain prices are likely to have less of an impact on food inflation than other factors. Food costs climbed about 4 percent in fiscal 2007 which ended in July and Cekander said they could climb to as high as 6 to 7 percent.

“It’s more of a function of distribution and energy and other factors…,” he said.