UNIVERSITY PARK, Pa. -- Pennsylvania livestock producers -- forced to buy more corn than usual to feed their animals after last summer's drought nearly wiped out their corn crops across the state -- can take solace in predictions that corn prices are likely to drop later this year, according to an expert in Penn State's College of Agricultural Sciences.

"With good weather, we'll have a good crop and steady to slightly lower corn prices for feed by fall," says Lou Moore, professor of agricultural economics. "Pennsylvania was hit particularly hard by the drought, harvesting just 64.6 million bushels last year. The crop was just slightly higher than the one harvested in the severe drought of 1988."

Persistent drought in the Midwest and high transportation costs resulting from soaring gasoline prices have combined to boost the price of corn to more than $3 a bushel. Although the drought seems to be over in Pennsylvania, continued dry conditions are forecast for the Midwest. And oil prices remain extremely volatile due to war and political unrest in the Middle East and South America.

Corn is most important as feed for dairy cows in the state. Pennsylvania remains the nation's fourth largest milk-producing state, and fully 40 percent of Pennsylvania's agricultural receipts are generated by the dairy industry. Corn also is used as feed for beef cattle, swine and poultry. Virtually all field corn grown in the state is fed to livestock. "So when we have a severe drought like last year, it hurts livestock producers most because they have to buy more feed," Moore explains. "Even though there is a lot of corn grown in the state, Pennsylvania's corn production represents just 2 percent of the national corn crop.

"Pennsylvania is the 18th most important agricultural state in the country," Moore adds. "According to a report released in late March by the Pennsylvania Department of Agriculture, 1.45 million acres of corn are expected to be planted in the state in 2003. More than 79 million acres of corn will be planted across the country. So even though we are the most important corn state in the Northeast, we do not produce enough to have any influence on corn prices."

Nationally, Moore points out, about the same amount of corn will be planted this year as last, ending a trend toward farmers planting less corn and more soybeans. He attributes that change to lower government subsidies for soybean production. Less corn is expected to be grown this year in Plains states such as Nebraska because of continuing drought, but prospects appear good for corn production in what Moore called the "eastern corn belt," states such as Ohio, Illinois and Indiana.

"This should be the eighth consecutive year in which the corn harvest will be over 9 billion bushels, making it feasible to feed livestock," Moore says. "If the weather is favorable, this year could produce a near-record crop."

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EDITORS: Contact Lou Moore by phone at 814-865-0460 or by e-mail at hlm4@psu.edu.

Contact:

Jeff Mulhollem jjm29@psu.edu 814-863-2719 814-863-9877 fax #148