The boom in corn prices that helped propel the U.S. farm economy is fading amid expectations for a record-high harvest.
Prices are down more than 40% from last year's all-time highs, to their lowest point in nearly three years. The decline is bringing relief to meat producers and other food companies hurt by steep costs for animal feed and other ingredients made from corn. Lower corn prices also could curb supermarket prices for beef.
But the slide is bad news for farmers who saw their incomes surge to the highest levels since the early 1970s, adjusted for inflation, while farmland values ballooned so much that some analysts worried about a bubble. Lower corn prices will squeeze profit margins, farmers who rent land for their crops might struggle to make money, and sales of tractors and other farm supplies likely will suffer.
Corn is the largest U.S. crop, grown on more than 400,000 farms. The total area harvested for the grain is as big as New Mexico. On Friday, corn traded in the futures market for slightly more than $4.65 a bushel, down from $8.31 a bushel last August. Prices for soybeans, the U.S.'s second-biggest crop, are down more than 20% from a year ago.This may be a double whammy for corn farmers. The ethanol industry is starting to take some hits also.