Ethanol helps to boost U.S. farmers' bottom line

By Christopher Doering

NEW ORLEANS (Reuters) - U.S. farmers overwhelmingly said they have benefited from the demand for corn to produce ethanol, with 71 percent of those surveyed saying the renewable fuel has helped boost their bottom line, according to a Reuters poll released on Wednesday.

The demand for corn to meet growing consumption by the food and biofuels industries has pushed the price of the grain from about $2 to $3 a bushel, where it was for several years, to an 11-year high of about $5.00 a bushel.

David Waide, a Mississippi corn, soybeans, wheat and cattle farmer, said he has received over $3.00 for corn for years because he lives in a remote area of the state that doesn't grow much of the crop. But even he has enjoyed the jump in corn prices.

"The fact that we've been able to get $4, $4.50 for corn has been a real income boost," said Waide, who sells about 20,000 to 30,000 bushels of corn a year.

The price increase has come even as a record 13.074 billion bushels of corn were harvested in 2007, according to the U.S. Agriculture Department. The U.S. government has estimated 24 percent of the 2007 corn crop went to ethanol production, up from 14 percent two years ago.

U.S. ethanol production could climb to more than 9 billion gallons (34 billion liters) in 2008, up from 6.5 billion gallons in 2007, according to the Renewable Fuels Association.

Congress requires at least 9 billion gallons to be blended into gasoline in 2008, but RFA said demand could be higher if refiners choose to blend more ethanol than required by law.

The rush to build new ethanol plants has not come without problems for the industry. Ethanol output has surged as newly constructed plants come online.