Boom in corn planting as farmers enjoy price spike due to ethanol demand

Wednesday, August 15, 2007 by: David Gutierrez, staff writer
Tags: ethanol, agricultural news, health news

(NewsTarget) Spurred by an explosion in the market for ethanol and the concurrent spike in corn prices, U.S. farmers are planting corn over the largest area since 1944, according to a survey conducted by the Department of Agriculture.

Based on the survey of 86,000 farmers, the department projected the planting of 90.45 million acres of corn this spring, which could yield 12.5 million bushels given normal weather conditions. This would be 700 million bushels larger than the prior record harvest in 2004.

The department has forecasted a national corn usage of 12.3 billion bushels for the next year. Of this amount, 3.2 billion bushels are estimated to be used for ethanol -- one billion bushels more than were used in 2006.

Ethanol is increasingly being pushed as a fuel additive by the Bush administration as a way of reducing domestic petroleum consumption. U.S. ethanol production is predicted to reach 6.5 billion gallons in 2007, in comparison with 4.9 billion gallons last year.

This ethanol boom has driven a spike in corn prices, predicted to reach $3 a bushel by the end of 2007. This has led farmers to favor corn over soy in the Midwest and rice in the South.

The Environmental Working Group (EWG) has cautioned that this corn boom may have severe ecological consequences, warning that an ethanol-driven rush to plant corn on ever more farmland may lead to an explosion in the use of dangerous synthetic fertilizers and pesticides, which leach easily from cropland into surrounding water supplies.

The EWG has also spoken out against a plan, being considered by the USDA, to relax the financial barriers that prevent farmers from withdrawing their land from the national Conservation Reserve, a program that pays them to refrain from planting on ecologically sensitive land. Secretary of Agriculture Mike Johanns has said the agency will reach a decision on this issue by early summer, and that currently protected lands could be available for planting by 2008.