WEST LAFAYETTE, Ind., June 24 (UPI) -- The economics of corn, tied to oil and food, also may be tied to record losses in some U.S. farm areas in 2008, a Purdue University agricultural economist says.
Record corn prices -- at $7 a bushel and climbing -- are pressured by ethanol production, domestic livestock and foreign buyers, economist Chris Hurt said.
Ethanol producers are expected to purchase 4 billion bushels this year, 1 billion more than last year. But "the ethanol industry … might not be able to bid the price," Hurt said in a statement.
Floods in the Midwest and a wet spring across the corn belt have reduced estimates of U.S. acres planted in the to 76 million, down 10 million from a year ago, which could drive prices higher.
The U.S. Department of Agriculture now estimates 2008 to fall 1.4 billion bushels short of the record 13.1 billion bushels produced in 2007.
That makes the crop even more valuable. Farmers "have the most invested in this crop of any crop they have ever raised," Hurt said.
"So if they are losing that crop, it is going to be the biggest dollar loss that we have ever experienced on a per-acre basis."