(AP) — Farmers hope to plant a record crop of soybeans and another huge corn crop this spring, helping fill grain bins around the country and easing fears of global food shortages, according to a report released Wednesday.
The report by the USDA of estimated crop acreage caused steep drops in soybean and corn prices as analysts reacted to forecasts that reserves of the crops would increase this fall.
Crop futures fell Wednesday on the Chicago Board of trade, with corn dropping 9.5 cents to $3.45 a bushel. Soybeans fell 33 cents to $9.41 a bushel and wheat fell 21 cents to $4.50 a bushel.
That means supplies won't be so low in the global food market, where unprecedented demand from the biofuels and meat industries had drained reserves to dangerous levels in recent years.
"It means we're not going to be in as tight of a situation as we thought we would be," said Pat Westoff, co-director of the Food and Agricultural Policy Research Institute at the University of Missouri.
Although prices for corn and soybeans are far below record levels seen in 2008, farmers like Tim Burrack said the crops still should be profitable due to lower costs for fertilizer and fuel.
Burrack, who farms in northeastern Iowa, has begun preparing his 2,000 acres for the spring planting. He plans to boost his corn acreage by at least 160 acres this year, and he knew other farmers would do the same even though prices probably would fall this summer because of increased production.
"It looks to me like we're in a new parameter now for corn and soybean prices," he said. "They'll be lower than they have been."
Kevin Roth, a farmer in southwest Iowa, said he and his neighbors also plan to grow more corn. He'll devote about two-thirds of his property to corn and the rest to soybeans.
He could only shrug at news that decisions by farmers to grow more corn would cause prices to drop.
"It looks a lot better when the markets are going up," Roth said. "Today, they're not heading in the right direction."
The savings will be felt more quickly by livestock producers that buy huge quantities of corn and soybeans for animal feed, which could eventually hold down the price of beef and pork.
Copyright 2010 The Associated Press.