ROANOKE TIMES
Copyright (c) 1996, Roanoke Times
DATE: Saturday, May 11, 1996 TAG: 9605130053
SECTION: BUSINESS PAGE: A-6 EDITION: METRO
DATELINE: WASHINGTON
SOURCE: Associated Press
THE FORECAST for winter wheat hits an 18-year low, translating to higher prices at the market.
Colorado wheat farmer Monty Wessler will probably harvest no wheat from the 3,000 acres he planted last fall. And the drought that ruined his crop is working its way into food prices.
Because of dry weather in the Plains and freeze damage in the Midwest, the Agriculture Department on Friday forecast a winter wheat harvest of 1.36 billion bushels - the lowest since 1978. It said conditions were so bad that farmers have simply abandoned the crop in 23 percent of their fields.
Some farmers will plant corn, sorghum or other feed crops on the former wheat acres. But even so, the country's grain supplies are the tightest in decades. Although grains generally make up a small part of food costs, that's changing because of record prices.
Economist Paul T. Prentice just changed forecasts to predict food prices rising 5 percent in 1997 because of increases for bread, pasta, other grain products, red meat and poultry.
The increases will start this year but will be offset overall, at least this year, by short-term drops in meat prices as producers sell off animals rather than pay the high cost of corn and other feed. The slaughter turns to shortage in the long run.
``These price increases are in the pipeline to consumers,'' said Prentice, president of Farm Sector Economics Inc. in Colorado Springs, Colo. ``They'll be showing up over the summer, in the next month or so.''
Bakery and cereal products could rise 6 percent this year because of skyrocketing wheat prices, with pasta leading the pack because it's so dense in wheat.
Winter wheat, used in bread, accounts for two-thirds of U.S. production. Because of the 12 percent decline from last year's poor harvest, the overall wheat crop will fall 5 percent to 2.07 billion bushels this year, the Agriculture Department said.
LENGTH: Short : 46 linesby CNB