Economists predict lower food prices due to better corn, soybean crop

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WEST LAFAYETTE, Ind.– Purdue economists predict lower food prices as this year’s Indiana soybean and corn yields are expected to be the best in the entire Midwest.

Last summer, a harsh drought devastated the crop. Purdue agriculture economist Dr. Corinne Alexander called it the “worst drought we’ve ever seen in the United States” behind the Dust Bowl period.

The drought impacted the entire food industry.

“(From) the food producers who maybe make corn tortilla chips or your corn flakes to the livestock producers that are using the corn to feed their animals. All of these users had to reduce their usage of corn,” explained Alexander. “This year is so much better than last year.”

That will mean lower or stable food prices over the course of the next year.

Alexander said consumers should notice prices for pasta, bread, and cereal decrease first. By the start of 2014, poultry prices should drop as well. Then look for savings on pork by next summer. Beef lovers will have to be patient, Alexander said, as those prices will not normalize for another three years.

“We’re not seeing an improvement in pasture conditions out west where a lot of the cows are raised. So the whole beef sector, it’s gonna take longer for them to recover from this drought,” she explained.

Economists won’t be able to predict just how much cheaper your grocery run will be until after the harvest which usually happens in October.

However, Alexander said this is a good sign of things to come.

“Keep your fingers crossed for a late frost and lots of rain and lots of hot weather and just good growing weather, because this is good news for U.S. consumers.”