The US Department of Agriculture has predicted that corn production will dramatically fall this year, setting off alarm bells in the food industry. 

According to the March Prospective Planting Report, this year farmers will plant around 86m acres of corn, a year-on-year drop of 8%.

With the food industry - particularly meat producers - already struggling to offset higher corn costs, a fall in production is not welcome news, the Grocery Manufacturers Association told just-food today (1 April).

"Demand for corn is through the roof thanks to the US government's food-to-fuel mandates," a spokesperson for the industry body said. "Food prices have already increased as companies have tried to pass this cost to shoppers. If production drops, costs will go even higher."

Meat processors, including Tyson Foods and Pilgrim's Pride, have blamed spiralling corn costs for their recent decisions to scale back their operations.

The GMA has criticised Washington's biofuels targets, emphasising the strain that has been placed on the food industry as a consequence.

"Food prices are rising twice as fast as inflation, placing significant pressure on American families who are already suffering from economic uncertainty," the GMA said. "It's time for Congress and the administration to offer families some relief and stop food inflation by reversing the impact of these costly food-to-fuel mandates."

BB&T analyst Heather Jones has also waned that decreased corn production could have a negative impact on the food industry, the Associated Press reported.

In a note to investors, Jones said that if USDA estimates were accurate corn production would fail to meet demand this year. If this were the case, Jones said that corn rationing could become necessary.

"We believe demand must be rationed or there needs to be a big supply response from other growing regions of the world," Jones wrote.