USDA: Ethanol demand requires 10 million more acres of corn

Washington, D.C. – Farmers must grow more corn in coming years to keep up with the demand for fuel ethanol, the government’s top agricultural economist says.

The nation would need 90 million acres of corn by 2010 – 10 million more than farmers have been planting in recent years – to fill ethanol demand while maintaining existing markets for exports and animal feed, said Keith Collins, the U.S. Agriculture Department’s chief economist.

Farmers in Iowa planted 12.7 million acres of corn this year.

The growth in ethanol production also is likely to push corn prices to record levels in coming years, Collins told the Senate Environment and Public Works Committee on Wednesday.

Rises in corn prices reduce government subsidies but increase the cost of animal feed, potentially raising food prices.

The record average annual price of corn was set in 1995 at $3.24 a bushel. This year, USDA expects corn prices to average between $2.15 and $2.55 a bushel.

“There will be some costs (to rising ethanol production), there is no question about that. But it can be manageable given the objective of reducing foreign oil imports,” Collins told the senators.