DES MOINES, Iowa Midwest floods may not contribute as much to food inflation as was feared.
Corn prices fell Monday after the government surprised traders, reporting farmers tried to cash in on soaring corn demand for ethanol by planting more acres of the crop than the market expected.
That could be good news for shoppers, although food prices still have to contend with rising costs for distribution and for fuel.
Farmers will harvest nearly 9 percent fewer acres of corn this year than last year, in part because of Midwest flooding that has damaged a portion of the crop, the government reported.
But the latest USDA figures also showed that farmers had planted more than a million additional acres of corn than they had expected to plant in March, which may remove some of the inflation potential out of the floods. Corn futures prices fell in the wake of Monday's report.
The U.S. Department of Agriculture said farmers expect to harvest 78.9 million acres of corn, down 8.7 percent from the 86.5 million harvested last year. But the acres planted were still higher than the 86 million acres that farmers had anticipated planting in corn when asked about it in March.