After recent shortages in parts of the world and a run-up in prices, a bumper grain crop is shaping up this year—promising some price relief for consumers at the grocery checkout.
Rising production and large stocks have sent prices of corn, soybeans and wheat down by more than 40 percent from their 2014 highs, according to Hamish Smith, a commodities economist at Capital Economics.
"With a growing glut in the world market, we think prices have further to fall," he said in a report Monday.
The USDA recently bumped up its estimate for grain production around the world, based on good growing conditions in the U.S. and Europe. That will help push prices even lower into next year.
In the U.S., higher food prices earlier this year raised fears that inflation might accelerate.Those higher costs were the result of the ongoing drought in California, along with brutal winter storms and freezing temperatures in the Midwest.
But food prices—along with a sharp drop in oil and gasoline prices—have largely eliminated those concerns.
The strengthening dollar will also help push U.S. prices lower, according to Smith. He also notes that lower oil prices will reduce production costs for farmers and food processors.