Got Corn Flakes - better get um.

WASHINGTON - Farmers are expected to plant less corn this year, which could mean higher continuing higher costs for consumers at the grocery store.

Corn prices have skyrocketed in recent years, helped by the burgeoning ethanol industry, which turns the crop into fuel, and rising worldwide demand for food. The higher prices have hurt poultry, beef and pork companies, who use corn to feed their animals.

Farmers are expected to plant 86 million acres of corn this year, the Department of Agriculture predicted Monday, down 8 percent from 2007, when the amount of corn planted was the highest since World War II. The decreased supply could drive corn prices even higher — a cost for food producers that could be passed on to consumers.

According to the Agriculture Department, corn planting is expected to remain at historically high levels but could be down this year because of the high expense of growing corn and favorable prices for other crops, such as soybeans.

As many farmers have made that switch, soybean planting is expected to be up 18 percent this year, at almost 75 million acres. The largest increases in soybean planting are expected in Iowa and Nebraska.

Though the ethanol industry is heavily subsidized and has contributed to the rise in prices, a decrease in corn production could hurt that business, too. Higher prices for the crop could be passed on to those filling their cars up with the renewable fuel.

The number of ethanol plants has increased from 50 in 1999 to 134 now with more being built, according to the Renewable Fuels Association. An average, 100 million gallon-per-year ethanol plant consumes about 33 million bushels of corn.

The Department of Agriculture report is based on sample surveys of 86,000 farm operators in the first two weeks of March.

Terry Francl, a senior economist for the American Farm Bureau Federation, predicted Monday that corn prices will continue to rise — possibly to $6 a bushel, around three times the price in 2005 — but says consumers shouldn’t panic just yet.

http://www.msnbc.msn.com/id/23879136/

I don't think the poor folks can stand very many more brilliant "cost cutting programs" being mandated and funded by the Politicians.

ps, which gets the most mileage?

Vehicles burning 100 million gallons of ethanol, ........ or people eating 33 million bushels of corn?

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I have been doing alot of reading about ethanol and its effect on the broader markets. It isn't pretty. The politicians have been funneling money to the oil companies for years, now they are funneling it to farmers and agribusiness.

I hope you know that the oil companies get a 51 cent per gallon allowance from the government to mic ethanol with gasoline. At the same time bread, milk, and eventually the meat markets are inflating at many times the core inflation rate. Yes sir, the democrats and republicans are really out there helping folks. Yes, it is both parties who passed overwhelmingly the 2007 energy and security act that started this mess.

Cato