Roland Inskeep of Battlefield Farms in Culpeper is planting about 1,200 acres of corn. His crop goes mostly to feed dairy cows, but other farmers are planting more corn this year because ethanol demand has pushed prices so high. SUZANNE CARR ROSSI/THE FREE LANCE-STAR View More Images from this story Visit the Photo Place

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Rising corn prices fuel planting--and concern

Demand for ethanol prompts many area farmers to plant more corn, which could have impact on Chesapeake Bay and price of other food

Date published: 4/26/2007

BY FRANK DELANO

A surge in corn prices has area farmers hoping for profit this year, but environmentalists fear the record-breaking crop will set back efforts to restore the Chesapeake Bay.

Demand for ethanol, a gasoline alternative distilled from corn, caused corn prices to exceed $4 a bushel early this year, double the price farmers received two years ago.

Today, F.E. Jones & Sons Granary Inc. at Montross is paying $3.49 for a bushel of corn. A year ago, said Barbara Jean Jones, the price was $2.22.

The high prices have caused U.S. farmers to plant the biggest crop of corn since 1944, according to the U.S. Department of Agriculture.

This year, USDA estimates America's farmers will plant 90.5 million acres, an area the size of Virginia, North Carolina and Pennsylvania.

Nationwide, the increase is 15 percent more than last year. In Virginia, corn acreage is expected to jump from 480,000 acres last year to 520,000 this year.

This week, in fields from the Northern Neck to Culpeper, farmers hoping to cash in climbed on their tractors and dropped millions of coated kernels barely bigger than teeth below the surface of thousands of acres.

Westmoreland County farmer Danny Allensworth was one of them. He said he would raise about 600 acres of corn this year, compared with 400 acres last year.

"But I'm not rich yet," said Allensworth, noting that the cost of seed, fertilizer, chemicals and fuel have also risen. He estimated that it will cost nearly $400 to plant an acre of corn.

If the luck of the summer weather is with him, Allensworth hopes to average about 130 bushels of corn--and a gross profit of about $520 an acre.

In Culpeper County, farmer Jack Inskeep says he's planting about 100 more acres in corn than usual. But his decision wasn't driven by higher prices.

"With our corn/soybean year-to-year rotation, it just worked out that way," Inskeep said.

Corn farmers are also expected to apply thousands more tons of fertilizer containing nitrogen and phosphorous, major pollutants of the Chesapeake Bay and other watersheds.

BY DONNIE JOHNSTON Some area farmers have already sold their corn on the futures market at close to $4 a bushel. That means the stakes for this year's crop are extremely high--and so are the risks. Farmers who lock in too high a proportion of their expected crops and then can't fill their quotas must make up the difference from their own pockets, thus dramatically lowering profits or, in extreme cases, forcing losses. Weather, either lack of rain or too much of it, can sometimes cut yields by as much as half. Farmer's who don't play the futures market are also gambling by planting more corn. Crop insurance for this season has jumped proportionally to the skyrocketing prices. "The price farmers are paying is way up," said Pat Martin, whose insurance agency is Culpeper County's major crop insurance broker. "In some cases, it is up by 60 [percent] to 70 percent or even more." Higher fertilizer and diesel prices are also adding to farmers' risks. Fertilizer jumped 5 percent in a single week earlier this month and diesel remains about $3 a gallon. And because of germination problems last year, seed corn is both expensive and in short supply. Jeffersonton farmer Bradley Rosenberger, who not only grows corn but is a large dealer for Pioneer Seeds, says farmers who lose their first planting because of cold or wet conditions may be out of luck. "They may not be able to get enough seed--at any price--if they need to replant," he said. Donnie Johnston:djohnston@freelancestar.com

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Date published: 4/26/2007