Consumption is outpacing crop production in the U.S. and other grain-growing nations for the first time in years, and unfriendly weather isn't helping matters.

World soybean and wheat inventories are at their lowest points since 1996, with corn stocks the tightest they've been in 27 years, says Chris Hurt, Purdue University ag economist. He warns that the consumption and production gap could expand even further if 2002 crop yields are below average.

Crops around the world are struggling under drought conditions or problems caused by late planting, Hurt says. Carryover numbers dispel the myths that excess crop production is here to stay and low farm prices are a permanent fixture.

“We have to recognize that world stocks have tightened substantially. We're virtually without surplus at this time. Any situation where there's extra demand or lower supplies, as we're looking at this year, can lead to substantially stronger prices,” Hurt says.