American farmers plan to plant more corn this year

The U.S. Department of Agriculture released findings this morning which show American growers plan to plant more acres of corn this year—more than 90 million—than in any year since World War II.

That's an increase of 15 percent from last year's 78 million acres planted.

The prospective planting survey is a strong signal of how this year's corn crop and prices will turn out, which can also affect livestock feed and consumer prices at the supermarket.

The USDA report shows growers' intentions to reduce soybean acreage by 11 percent from last year, to 67 million acres, in efforts to capitalize on soaring corn prices caused at large part by demand for ethanol.

As President Bush pushes for increased ethanol production and use, corn prices have jumped to $4 per bushel from around $2 just two years ago.

"High corn prices can spell trouble for livestock farmers, who need grains to feed their cattle, swine and poultry. The possibility of a rainy spring or a dry summer also has the market on edge, as either could drive demand and prices even higher. Eventually, high corn prices could lead to higher prices at the supermarket on meats and other corn-based foods," noted Northstar Commodity in a statement today.

Northstar provides commodity market analysis, trading and risk management services for growers, grain elevators, processors and investors around the world.

"I want to emphasize that these are intentions of what people are going to look at planting. That can still change based on the weather situation as we move into the next two to three weeks," said Mark Schultz, vice president of Northstar Commodity, which provides commodity market analysis, trading and risk management services for growers, grain elevators, processors and investors around the world.

"If it's not ideal planting [weather], watch them switch back to soybeans," he said.

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