Feb. 22 (Bloomberg) -- Prices for the two biggest U.S. crops will fall this year on record corn and soybean production, easing food inflation while providing less cash for growers recovering from drought, the government said.

Corn will plunge 33 percent and soybeans will drop 27 percent, Joe Glauber, the chief economist at the U.S. Department of Agriculture, said yesterday at the agency’s annual outlook forum. Corn inventories before the 2014 harvest will triple from this year’s projected figure, the department said today. The increased supplies mean receipts for the major crops will fall 1.5 percent to $216.3 billion, the USDA said.

The lower prices, which are below a separate USDA 10-year forecast made earlier this month, are a classic supply response to the worst drought since the 1930s, Glauber said. After the dry conditions pushed corn to a record $8.49 a bushel on the Chicago Board of Trade in August, growers are planning to produce more, driving prices lower as inventories rebuild, he said. Farmer profit will still reach a record $128.2 billion this year as supplies are replenished, the USDA said.

"High prices ahead of planting should encourage large corn and soybean acreages, and, assuming normal yields, stock levels should rebuild and prices should moderate," Glauber said.

Planted Acreage

Farmers will plant 96.5 million acres of corn, for a crop of 14.53 billion bushels, the USDA said. About 77.5 million acres of soybeans will be sown, for projected output of 3.405 billion bushels; wheat acres will total 56 million, with production at 2.1 billion bushels, the department said.

Corn inventories will reach 2.177 billion bushels by Aug. 31, 2014, the most since 1988, the USDA said, while soybean supplies will total 250 million bushels, double a year earlier. Wheat reserves on May 31, 2014, will be 639 million bushels, down 7.5 percent.

Which crops farmers plant are crucial for seed-and- pesticide sellers including Monsanto Co. and DuPont Co., food- makers such as General Mills Co., and ethanol producers like Archer-Daniels-Midland Co., all of which have their profits affected by the availability of farm products.

Prices for wheat, the fourth-biggest U.S. crop, after hay, will drop 11 percent in the year starting June 1, the USDA said, even as production falls because of lingering drought in the western and southern Great Plains. Cotton prices will rise 2.8 percent while the area planted with the fiber falls to 10 million acres, the department said today.

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