* USDA report sends farm equipment, fertilizer shares up
* But food shares suffer as input costs seen rising
* CBOT corn, soybean and wheat futures limit up
A U.S. government report predicting a smaller-than-expected corn crop and tighter-than-expected stockpiles sent shares of farm equipment makers such as Deere & Co (DE.N) surging on Friday.
But the report weighed on the stocks of several top food producers, including Tyson Foods (TSN.N), Smithfield Foods (SFD.N), Pilgrims Pride (PPC.N) and Sanderson Farms Inc (SAFM.O).
Analysts said the moves reflected the view that higher corn prices -- grain prices on the Chicago Board of Trade surged following the government crop report -- would translate into fatter profits for grain farmers, who would funnel some of that extra money into purchases of new tractors and harvesters.
"Given the strong correlation between cash receipts and ag equipment sales, we think today's report is a positive read for Deere and CNH Global, and to a lesser extent Agco Corp," said JP Morgan analyst Ann Duignan.
But what is good news for grain farmers is bad news for poultry and livestock farmers -- and the food companies that buy their products -- because corn and other grains are the leading form of animal feed.
If corn prices go up, their profits are likely to suffer unless they raise prices, which is hard to do in the current economy.
"Meat producers are down because corn is their largest expenditure," said Frederic Ruffy, options strategist at Web information site WhatsTrading.com in New York.
Shares in Deere. the world's largest maker of tractors and combines, rose as much as 6.6 percent, while rivals Agco (AGCO.N) and Fiat SpA (FIA.MI) subsidiary CNH NV (CNH.N) rose as much as 10.4 percent and 9.1 percent, respectively.
The swings were just nearly as large for food companies, but in the opposite direction.
Shares of meat producer Tyson Foods fell as much 8.1 percent, Smithfield Foods fell as much as 7.4 percent, Pilgrims Pride fell as much as 5.7 percent and Sanderson Farms fell as much as 6.7 percent.
The stock moves came after the U.S. Agriculture Department cut its estimate of the corn crop by 4 percent and soybeans by 2 percent based on conditions Oct. 1.
Its forecast of crop size and a bare-bones level of season-ending stocks were well below analysts' expectations and sent grain prices soaring in Chicago.
At the CBOT, corn, soybean and wheat futures each rose by the maximum permitted daily amount. Corn for December delivery zoomed 30 cents to $5.28-1/4 a bushel, December soybeans rocketed 70 cents to $11.35 a bushel, and wheat shot up 60 cents to $7.19-1/4.
Futures prices soared as well in European grain markets and U.S. live cattle and hog futures surged as an inducement to producers to fatten livestock for slaughter in the face of rising feed prices.
Fertilizer shares also rose, with analyst Edlain Rodriguez of Broadpoint Glecher saying farmers will need nutrients to expand corn production. Potash Corp (POT.TO) stocks were about 2 percent higher, Agrium (AGU.TO) and Mosaic Co (MOS.N) shares were up nearly 6 percent and CF Industries (CF.N) was up 8 percent. (Additional reporting by Charles Abbott in Washington; Editing by Derek Caney)
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