Agri. & Environ.
Corn production expected to drop in 2008
By Sue Mueller
Mar 31, 2008 - 1:21:40 PM

MONDAY March 31, 2008 (foodconsumer.org) -- A report by the United States Department of Agriculture released Monday shows that U.S. farmers are going to grow eight percent less corn in 2008 than last year, Forbes.com reported.

Due to the high demand for corn from the ethanol production sector and less supply from the farms, food producers, eventually consumers are likely going to pay a high price.

According to news media reports, even in 2007 when corn production was the highest since 1949, corn prices were high enough to force food companies to raise retail prices to offset the increased cost for the food.

Meat processors and packers are no exception.   Pilgrim’s Pride, the largest poultry company in the United States said it would close a chicken processing plant and lay off 1,100 workers due to the increase in the corn price, triggering its share to drop 0.7% to $20.33.

Tyson Foods, the world largest meat processor, has also severely affected by the uncertainty around rising commodity prices and witnessed a drop in its shares by 0.8% to $16.00 this afternoon.

On the other hand, the March Prospective Plantings Report projected that soybean acreage was expected to increase 18%, to 74.8 million acres, an increase of 11.2 million acres from 2007. Wheat was expected to follow suit to increase by 6% to 63.8 million acres.

But big food companies like Kellogg and General Mills saw their shares dropped 0.7% and 0.8% respectively on Monday afternoon, according to Forbes.com.