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Glauber: World crop prices to drop, ethanol demand slows

USDA Chief Economist Joe Glauber said crop prices around the world are forecast to drop sharply this year as farmers increase production to ease fears of food inflation and bring stability back to commodity markets, Reuters reported Thursday.

"Certainly the high prices that we saw last year have prompted a global production response for most commodities," Glauber said at the USDA Agricultural Outlook Forum, according to the Reuters report. "This should help relieve some of the volatility that have roiled markets over the past five years and improve prospects for future livestock expansion," he said.

Glauber also said ethanol demand will be down in conjunction with Energy Department forecasts for declining fuel use, Reuters reported.

Although ethanol makers produced a record 13.9 billion gallons in 2011, they face a "blend wall" of 13.5 gallons in sales in the new marketing year, Glauber said, as gasoline sales slow with the sluggish economy.