WASHINGTON - US farmers will plant their highest levels of corn since 1944 amid surging demand for ethanol fuels to replace petroleum, a government report showed Friday.
The US Department of Agriculture said land devoted to corn planting will increase 15 percent this year to 36.6 million hectares (90 million acres).
The move to corn, a key crop for ethanol used for gasoline blends, comes amid a decline of 11 percent in acreage devoted to soybeans and a 20 percent drop in cotton plantings.
The shift to ethanol has changed the landscape for both the energy sector and agriculture as increasing amounts of corn are diverted to fuel.
This has affected the United States and other countries where corn is an important food staple, such as Mexico.
Bill Nelson, an analyst at AG Edwards, said the current planting report shows an "extraordinary" shift, with normal changes of one percent or less each year.
"The market has pushed corn prices to record levels," he said, noting that December corn futures have topped four dollars a bushel for the first time in history.
This has led to an exceptional shift away from other crops such as cotton, and even with that, Nelson said: "In two years, we may have problems in meeting Chinese demand."
Don Roose, analyst at US Commodities, said about 3.5 million bushels of corn are expected to be used for ethanol this year, up from 2.1 million a year earlier.
03/30/2007 15:12 GMT