Smaller crops in Md. and U.S. likely to boost grocery prices

State farmers suffer more than others from drought

October 12, 2002|By Ted Shelsby | Ted Shelsby,SUN STAFF

Smaller grain harvests in Maryland and the rest of the nation, the result of a widespread drought, are expected to boost food prices at the grocery store this year and next, agriculture analysts said yesterday.

Maryland grain farmers are harvesting their smallest corn crop in seven years and their smallest soybean crop since 1999, according to a government survey released yesterday.

Field surveys by the U. S. Department of Agriculture show that state farmers are suffering considerably more from this year's drought than are farmers in other parts of the country.

The USDA is forecasting that this year's national corn crop will be 6 percent smaller than last year's and that the soybean harvest will be off 8 percent.

Corn and soybeans are primary animal feed crops. The smaller harvests are pushing up grain prices, which are working their way through the food-supply system and will lead to higher prices for consumers at the supermarket.

The production declines are enough to affect food prices, said John Urbanchuk, an agricultural economist at LECG LLC., a legal and economic consulting group in Wayne, Pa. He predicted that food prices will jump 2.8 percent this year and 3.5 percent more next year.

Jack Hervey, senior agricultural economist with the Federal Reserve Bank of Chicago, said food prices could go up next year but that "the increase would not likely be enough to cause a major concern among consumers."

He said food prices, including meals eaten out, are about 15 percent of the Consumer Price Index.

Jamie Miller, a spokesman for Giant Foods Inc., which operates 106 grocery stores in Maryland, said that "food prices fluctuate daily, based on supply and demand."

At this point, he said, he could not say whether any increases were a result of higher grain prices.

Norman W. Bennett, state statistician for the U. S. Department of Agriculture's crop reporting service, said Maryland farmers are expected to harvest 33.2 million bushels of corn this year.

That would be 41 percent smaller than last year's crop.

He said the yield per acre of corn planted is projected at 78 bushels, compared with last year's yield of 136 bushels per acre.

He said Maryland's soybean production is forecast at 11 million bushels, 47 percent smaller than last year's crop.

On average, farmers are harvesting 21 bushels of beans per acre, down from 39 bushels per acre a year ago.

There was virtually no change in the government's estimates of the size of the state crops from last month.

Bennett said corn prices are up 22 percent this year and soybean prices are up 18 percent. Farmers are still being paid 24 percent less for their corn this year than in 1995.

For the nation as a whole, the government estimated that corn production will total 8.97 billion bushels. Although this is up 1 percent from last month's estimate, it is 6 percent lower than a year ago.

The nation's soybean harvest is estimated at 2.65 billion bushels, unchanged from last month's estimate but 8 percent smaller than last year's crop.

Both the state and national estimates were based on field conditions as of Oct. 1.

Lynne Hoot, executive director of the Maryland Grain Producers Association, said this year's drought is particularly hard on state farmers because it follows several years of near-record-low grain prices.

She said some growers "are looking at their individual financial situation and asking themselves if its time for them to get out of farming."

Bloomberg News contributed to this article.

Baltimore Sun Articles
Please note the green-lined linked article text has been applied commercially without any involvement from our newsroom editors, reporters or any other editorial staff.