Ethanol demand boosting corn prices

The ethanol industry’s growing appetite for corn has pushed prices for the grain to their highest levels in a decade amid a surge that agricultural experts say could lead farmers next spring to plant their largest corn crop in 60 years.

Farmers who plant more corn in 2007, however, will be betting that the nation’s burgeoning ethanol industry won’t go bust and oil prices stay high, keeping up demand for the corn used to make ethanol, said Chris Hurt, a Purdue University agricultural economist.
“It’s a wonderful time for corn producers. They’re extremely excited but they’re also apprehensive because they’ve seen booms before and they don’t last,” he said.

More than 150 U.S. ethanol plants are either under construction, planned or in operation, and market forces are pushing up demand for corn. The crop is ground into a mash mixture that’s distilled into grain alcohol to become fuel.

With a growing amount of corn being diverted from food products and livestock feed toward ethanol production, per-bushel prices have increased about $1 since mid-September.

The State