Dry field conditions in much of the Corn Belt have analysts projecting smaller yields and higher corn and soybean prices for 2005-06. University of Illinois extension economist Darrel Good says the 2005 corn and soybean crops will be small enough to reduce year-ending stocks.

Although Good predicts higher prices, he believes it should be a modest increase unless the crops are small enough to require rationing.

He contends the price implication of a small U.S. crop and the potential need to reduce consumption will depend in part on the size of the 2006 South American crop. A large soybean harvest there could result in a reduction in exports without prices going too high. However, if South America has a third consecutive shortfall in production, that would magnify the implications of a small U.S. crop.

You should take note of these projections and keep an eye on harvest. The odds are good that you’ll be paying more for feed in the near future.