Food-price inflation may accelerate later this year because of low corn and soybean stockpiles, adding another economic concern for consumers and candidates.
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, according to a Bloomberg survey of 32 analysts. The U.S. Department of Agriculture will release its monthly inventories forecast tomorrow.
The government is already predicting food inflation of 2.5 percent to 3.5 percent in 2012, down from last year’s 3.7 and higher than 2009 or 2010. Drivers are already contending with gasoline prices that have jumped 20 percent this year, American Automobile Association data show.
“U.S. supplies are going to be tight and that means we need good weather this year to improve inventories,” said Shawn McCambridge, the senior grain analyst for Jefferies Bache in Chicago. He said reserves before the harvest will fall to 626 million bushels, or equal to 4.9 percent of consumption, below the record low of 5 percent in 1974.
The U.S. was the world’s biggest shipper of corn, soybeans and wheat last year, USDA data show.
By Alan Bjerga and Jeff Wilson