With US ethanol boom, corn is king this season

Farmers plant most acreage since 1944, hoping to cash in while corn demand is high.

By Amanda Paulson | Staff writer of The Christian Science Monitor

from the May 11, 2007 edition

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Chicago - Several years ago, Billy Joe Ragland planted nearly all cotton on the 5,200 acres he farms with his son in Bentonia, Miss., just north of Jackson.

This year, 4,200 of those acres will be corn.

"Everybody in this area is doing a lot more corn," he says. "If we have a decent year, I think we have a chance to maybe make a few dollars for a change."

With corn prices soaring due to the demand for ethanol, the US is looking at what may be its largest corn planting since World War II, according to US Department of Agriculture statistics. Some 90.5 million acres are expected to be planted – 15 percent more than in 2006.

If farmers get the yields they'd like – always a weather-dependent proposition, and one that may be tough this year with the planting delayed in many states because of a cold, rainy spring – it could be a banner year for many corn growers.

Still, there are downsides. The prospect of so much corn is already starting to push prices down, there's an environmental risk to planting more marginal land with such a fertilizer-intensive crop, and many farmers aren't quite sure where they'll store it all come harvest time.

"With that big a crop coming at us, we're going to have some storage problems, we're going to have some transportation problems, we'll have a little bit of everything coming at us," says Dan Zwicker, a market analyst with the Illinois Farm Bureau. But, he adds, "corn prices are such that it's hard to resist if you've got land that's capable of doing corn on corn [corn two years in a row]," rather than replenishing the nitrogen in a previous cornfield's soil by planting soybeans.

Mr. Zwicker and other economists note that the USDA's 90.5 million-acre figure came from a March survey of planting intentions when corn was trading at over $4 a bushel. This week, corn for July delivery was trading at $3.66 on the Chicago Board of Trade.

A wet spring that has delayed many farmers' corn planting complicates things further. At this point, around 53 percent of the corn crop has been planted, according to the USDA, compared with 67 percent at this point last year.

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