Crop prices rise 7.7 percent amid soggy harvest

ST. LOUIS — Crop prices jumped nearly 8 percent in October as rainy weather delayed harvests across the Midwest.

Farmers are still getting paid much less for their crops compared with a year ago, when global food shortages pushed grain prices to record highs. But the farm prices of corn, wheat and milk jumped this month, according to a report Friday from the Agriculture Department.

Corn prices rose 29 cents to $3.54 a bushel, and wheat prices jumped 8 cents to $4.56 a bushel. Soybeans dropped a penny to $9.74 a bushel.

Wholesale dairy prices jumped 7.1 percent in October, with milk reaching $1.19 per gallon. That’s a big increase for dairy farmers who have struggled with low prices over the last year, but it’s still down 22 percent from October 2008.

Commodity traders bid up crop prices this month based on fears that harvests will come in late and yields might be dragged down by excessive moisture, said Greg Wagner, a senior commodity analyst at Chicago-based AgResource Co.

“This could be the worst harvest in history, really, in terms of delays,” Wagner said.

The USDA crop prices represent what farmers get paid on the wholesale level for their goods — not what consumers pay. There can be a long lag time between price increases at the farm level, and those at the grocery store. Most retail food products don’t become more expensive unless farm prices climb for months at a time.

Meat prices continued to fall, down 1 percent in October and 12 percent from last year. Meat producers have been dogged by weaker demand and overproduction which has kept prices low.

Hog prices fell less than a penny to 37 cents per pound, while the beef cattle price fell nearly 2 cents to 79 cents pound. Poultry prices fell 2 cents to 40 cents a pound.

The rally in corn prices was good news for farmers, who have been nervously watching the markets to see if prices will cover the their costs as fertilizer and seed prices remain high.