Grain prices could hold, researchers say

CHAMPAIGN, Ill., Sept. 15 (UPI) -- An increased demand for ethanol is likely to prop up a sustained pattern of higher grain prices, University of Illinois economists said Monday.

Corn could sustain an average price of $4.60 a bushel and range from $3 to $6.70 a bushel, nearly twice the average $2.42 a bushel from 1973 to 2006, said agriculture and consumer economics professors Darrel Good and Scott Irwin.

The new pricing era could see sustained wheat prices of $5.80 a bushel, up from an historic average of $3.24, with prices ranging from $3.30 to $10.15 per bushel. Soybean prices could average $11.50, compared with a 1973 to 2006 price average of $6.15 per bushel, the professors said.

The new pricing patterns break three decades of relatively stagnant prices and could hold for up to 30 years, the professors said.

"The key is what happens in our crude oil and energy markets," Irwin said. "The risk on the downside is technological breakthroughs that would dramatically reduce oil consumption, lowering the whole price structure."

"If anything, though, the risk is on the other side," he said. We likely are going to continually be bumping into demand for crude-oil production that we can't easily get above."