About 30 national and state agribusiness groups have asked USDA to let farmers plant corn on Conservation Reserve Program (CRP) land so there will be enough grain for ethanol plants and livestock feeders.

In a letter to Agriculture Secretary Mike Johanns, the groups said USDA should "at minimum" permit withdrawal of land from the CRP "without penalty" to return it to crop production. They said it was critical that Johanns announce such a decision "as soon as possible."

Groups signing the letter included the American Meat Institute, the National Cattlemen's Beef Association, the National Grain and Feed Council and the National Oilseed Processors Association.

Corn acreage is expected to increase significantly this year, to 86 million acres, with some of the increase coming at the expense of hay acres. Still, USDA projects that 26% of the 2007 corn crop will be used to make ethanol, up from 20% of the 2006 crop. The agency also projects that the average U.S. farm price of corn could hit a record $3.50/bu in 2007-08.

Source: Richard Brock, The Corn And Soybean Digest.