United States-The drop in commodity prices.

UNITED STATES-WHY COMMODITY PRICES DROPPED.

A trio of economic factors that sent commodity

prices soaring in mid-2008 has reversed and now is pressuring them, according

to an updated report by three Purdue University agricultural economists.

"The three major drivers that we identified last year were trends in global

production and consumption, the value of the dollar, and biofuels," said Wally

Tyner, who, along with Philip Abbott and Chris Hurt, released "What’s Driving

Food Prices?" in July last year.

Tyner and Hurt found that a stronger U.S. dollar, falling ethanol demand and

rising grain stocks combined to send corn, soybean, wheat and rice prices

cascading in late 2008. Behind those dramatic changes is the global financial

crisis, the economists said.

Given time, consumers are likely to see lower prices for some food items,

Tyner said.

"Demand is down for everything," Tyner said. "In particular, demand is down

more for meat products, which means less demand for the corn and soybean meal

to produce meat. It filters through the system."

Hurt said, "Some products like eggs, milk and dairy will have lower prices

this year. Others like meats may be close to unchanged, and fruits and

vegetables will likely still be somewhat higher."