Corn cob held in a cornfield.
Corn cob held in a cornfield. - 
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Kai Ryssdal: Back in June, the devastating floods across the Midwest had brought predictions of even higher food prices. But since the rains came and went, the weather has been smiling on farmers. Today the government's latest crop survey pointed to what may be the second-largest corn crop in history. And there has been a correspondingly strong recovery for some other key grains, including soybeans and wheat. Marketplace's Bob Moon reports that should bring some relief, not only in the cost of food, but energy prices as well.

Bob Moon: The Agriculture Department was fairly singing the good news today.

Song clip: The corn is as high as an elephant's eye.

OK, so those weren't the report's exact words, but they're close. Farmers are on track to harvest 12.3 billion bushels of corn this year, up nearly 5 percent from last month's forecast. And, after soaring to a record of nearly 8 bucks a bushel, corn prices are expected to drop to around $6 and perhaps below 5.

Michael Swanson: We're lucky, because $8 corn would have been a very high burden for the American consumer to deal with.

Michael Swanson is an agricultural economist at Wells Fargo. He says cooler, wetter-than-usual weather helped farmers grow much more than they hoped.

Swanson: This kind of gives us some breathing room, because we have enough corn in the bins to not have to really be in a pure panic going into next year.

But it's not quite in the bins yet. These grains were planted late, so they need more time to grow, increasing the risk of freeze damage.

Swanson: I was talking to people in North Dakota yesterday, and they're just hoping that the wind stays from the south, instead of Canada.

If they hold up, lower prices will also be good news for livestock producers who've been struggling with higher feed prices. Chad Henderson is an analyst with Wisconsin-based Prime Agricultural Consultants. He says farmers see a flip side.

Chad Henderson A simple way to look at this is, with a $2-per-bushel drop in the corn price on a producer who has 150-bushel corn, he's lost about $300 an acre in potential revenue.

That may sound like a raw deal, but Henderson says it's still a lot better than farmers were expecting just a few months ago.

I'm Bob Moon for Marketplace.