Corn and soybeans prices as well as prices for certain other agricultural commodities will decrease “significantly” in 2013 as large corn and soybean harvests this fall refill the supply chain, USDA’s Chief Economist Dr. Joe Glauber predicted this week at USDA’s annual Agricultural Outlook Conference. A return to normal weather conditions will result in higher production that will pressure prices, Glauber added. Glauber predicted that corn prices will average $4.80 a bushel in 2013-14, down 33 percent from the previous marketing year. Soybean prices, he estimated, would fall 27 percent  to $10.50 per bushel.

“There’s no reason to believe that we won’t be looking at normal yields this year,” said Glauber, noting recent improvement in drought conditions, particularly in the eastern Corn Belt. “Historically, there’s little correlation between rainfall one year and the next.” Glauber expects that farmers this year will plant at least as many acres for corn, soybeans, and wheat as they did last year. He expects corn plantings to be down 0.7 percent, while soybeans acreage will be up 0.4 percent, and wheat area should gain 0.5 percent. “Combined acreage for those crops topped 230 million acres in 2012, and will likely approach similar levels for 2013,” he said.

Corn and soybean production should be up as a result of large plantings and better weather. USDA forecasts that corn production will be up 34.8 percent to 14.5 billion bushels and soybeans up 12.9 percent to 3.4 billion bushels.

Increased production of corn and soybeans should rebuild historically low stocks. World corn stocks are at the lowest levels since 1993-94. Wheat stocks have dropped to 2008-09 levels. Corn usage by ethanol manufacturers this year is not expected to return to 2011-12 levels. Glauber forecasts that 4.675 billion bushels of corn will go into ethanol, down from the 5,000 bushels used in 2011-12. Drivers are buying less gasoline because of economic problems and the increased fuel efficiency of cars, Glauber explained.

Lower feed prices later in the year may stem the loss of cattle. Glauber noted that the United States lost 3.4 million head in Kansas, Oklahoma, and Texas in the last two years. During the past summer, 60 percent of pastures suffered drought conditions. Without more rain, “unfortunately we could see further liquidation,” Glauber concluded.