“The reduction in U.S. corn and soybean supplies can be offset by production in and exportation from other countries, but there is some is concern about whether there will be adequate stock to comfortably carry the U.S. consumer over until we get more,” he said. “With lower grain production, as the supply tightens the prices will increase – certainly at least in the short term.

“There also was a small reduction in the wheat estimate, but that may be offset by increased production in Argentina, Australia and elsewhere. Plus, we’ll need to wait and see what happens with the upcoming Russian wheat harvest.”

There also has been a reduction in another significant agricultural commodity, beef cattle, said Dr. David Anderson, AgriLife Extension livestock economist. Anderson said cattle numbers will be fewer over the next decade, but the price of corn will dictate the level and spread in calf prices.

"I think we will continue seeing beef production and cattle numbers drop off in the next couple of years," he said. "We are forecast to produce 25.4 billion pounds of beef in 2011 versus 25.9 billion pounds in 2010. That will lead to increases in price, but it also depends on corn prices and (their effect on) calf prices."

Anderson said the first quarter of 2010 resulted in the least amount of beef supplies since 1997, after factoring out exports, and he expects that during each quarter through 2012 the beef supply will continue to decline.