The government reduced yesterday its estimate of the size of the corn crops in Maryland and the United States, signaling concern over higher food prices next year and a shakeout of local grain farmers.
In Maryland, farmers are looking at a corn crop that will be 44 percent smaller than last year, according to the U.S. Department of Agriculture's crop reporting service.
For the country as a whole, the USDA is projecting a corn crop of 8.85 billion bushels. This is 7 percent lower than last year and 1 percent lower than the government's estimate last month.
In Maryland, the soybean crop harvest is expected to be 47 percent smaller than a year ago, and in terms of yield per acre is expected to be the worst in 36 years, the USDA said.
The department raised its estimate of the country's soybean production by 1 percent over its August estimate, but said the 2.66 billion bushel crop would still be 8 percent smaller than last year's crop.
Both the state and national estimate were based on field conditions as of Sept. 1.
"There is major, major concern that a number of farmers won't make it this year," said Lynne Hoot, executive director of the Maryland Grain Producers Association. "These are really depressing times, and some farmers are reaching their breaking point. They can't pay their bills."
Analysts said that poultry companies such as Salisbury-based Perdue Farms Inc., and beef and pork processors will feel the pinch of a shortage of grain and higher prices. Corn and soybeans are the major animal-feed crops.
Consumers can expect to see higher prices at the grocery store next year, said Jack Hervey, senior agriculture economist with the Federal Reserve Bank of Chicago.
Donald Ratajczak, chief consulting economist at Morgan Keegan Inc. in Memphis, Tenn., predicted that food prices might increase as much as 3.5 percent next year.
Much of the United States is suffering from the same kind of drought that has parched fields and stunted grain growth throughout Maryland.
"It's bad just about everywhere," said Ray Garibay, state statistician for the U.S. Department of Agriculture's crop reporting service. "It's bad in Central Maryland. It's bad in Southern Maryland and on the Eastern Shore."
Garibay said the state corn yield is expected to be only 78 bushels an acre this year, down from last month's estimate of 87 bushels. Last year, the average yield was 136 bushels from each acre planted.
He said soybeans are expected to yield 21 bushels an acre, down from a projection of 31 bushels last month. Last year, farmers reaped 39 bushels of soybeans from each acre planted.
The plight of farmers in Maryland is worse than these numbers indicate, said Bradley H. Powers, deputy secretary of the Maryland Department of Agriculture.
"Discount the two most western counties and look from Frederick County east, and the corn yields will be close to 60 or 65 bushels per acre," Powers said.
Bloomberg News contributed to this article.