Greenwire -- Friday, March 30, 2007

ETHANOL: Farmers to plant most corn since 1944 -- USDA

Allison Winter, Greenwire reporter

Driven by an ethanol-fueled surge in corn prices, U.S. farmers are expected to plant more than 90 million acres of corn this year -- millions more acres than previously predicated and the largest planting of the crop since 1944, the Agriculture Department said today.

The estimate from USDA's Prospective Plantings report is 4 percent higher than the department's economists predicted earlier this month.

The USDA farm survey shows corn acreage up in nearly every state. Overall, farmers are expected to plant 15 percent more corn this year, with record-high acreage in Illinois, Minnesota, North Dakota, California and Idaho.

Farmers are planting corn wherever possible to meet rising demand for the crop from the ethanol industry. Corn is selling for nearly twice as much per bushel as it did last year.

The report was welcome news for advocates of biofuels.

Senate Agriculture Committee Chairman Tom Harkin (D-Iowa), who wants to bolster support for renewable fuels in the next farm bill and push for a more ambitious renewable fuels standard, said the report shows farmers will respond to market signals and should help "address concerns about corn supplies."

"The new data further confirms the potential for biofuels production," Harkin said.

Livestock producers, slammed by high prices for feed, have pushed back against ethanol supports, lobbying for a slow-down on the use of corn for fuel.

House Agriculture Committee Chairman Collin Peterson (D-Minn.) has repeatedly assured livestock producers that the market will take care of them as farmers plant more corn. "If there is one thing farmers know how to do, it is to overproduce when prices are high," Peterson said last week.

The increase in corn acreage is offset by lower soybean plantings in the corn belt and Great Plains, as well as a drop in acres of cotton and rice in the Delta and Southeast, according to the report. Soybean acreage will be its lowest in the past decade and cotton is expected to go down 20 percent from last year.

For the past several months, USDA economists have increased corn estimates with every prediction. In February, the department's chief economist, Keith Collins, said farmers could plant 86 million acres this year, then upped that to 87 million acres earlier this month.