U.S. corn stockpiles are poised to be the smallest in 16 years by August and soybean reserves will be lower than the government expected, potentially accelerating food-price inflation in an election year.
The U.S. Department of Agriculture may say tomorrow that corn inventories on Aug. 31 will be 37 percent lower than a year earlier at 715 million bushels (18.2 million metric tons), the average of 32 analyst forecasts compiled by Bloomberg show. That compares with a projection of 801 million bushels last month. Soybean stockpiles will be 242 million bushels, down from a March prediction of 275 million, the survey showed.
The government is already predicting food inflation of 2.5 percent to 3.5 percent in 2012. While that’s down from 3.7 percent in 2011, it would be higher than gains in as many as five of the past eight years. Drivers are contending with gasoline prices that have jumped 20 percent this year, American Automobile Association data show. Global food costs rose for the third straight month in March, the United Nations said April 5.
“Consumers will see additional price gains this year,” said Corinne Alexander, an agricultural economist at Purdue University in Lafayette, Indiana. “There will be no relief for consumers until later this year if high prices lead to large world crops.”