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Ethanol driving up corn production
US corn planting may climb more than 10 per cent this year because of higher prices (up 80 per cent) driven up by the rising demand for ethanol. The likely result will be reduced acreage devoted to soybeans and cotton, the American Farm Bureau said.
There's a rapidly growing demand for ethanol for use as a blending agent with gasoline to make it more environmentally friendly. In fact, a surge in US ethanol production will demand half the country’s corn supply by 2008.
American farmers may plant the fewest acres of soybeans in a decade, even as demand improves due to increased use of soy-based diesel. Soy diesel is another alternative fuel promoted by the government. The US is the largest producer and exporter of soybeans, followed by Brazil and Argentina.
Cotton planting may decline 12 per cent this year. On the bright side, declining acreage may help cotton prices adjust to lagging demand in China. Demand for US cotton in China, the largest importer of the fiber, is down 78 per cent this year.
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