Supply curves slope up, and there's gold in them thar corn fields:
CIUDAD SERDAN, Mexico - Rogelio Zacaula plucks an ear of corn from his field with the pride of a prospector unearthing the gold that legend says is buried in the slopes surrounding the nearby Orizaba volcano.
International corn prices driven by the burgeoning U.S. ethanol industry have soared to their highest in a decade, making farmers like Zacaula feel like they just won the jackpot.
"I have never seen prices like this," said Zacaula, 66, who has been growing corn since he was 10. "We suffered for so many years, years in which no one even wanted to buy our crop - until now."
Corn had languished around $2 a bushel for years before the ethanol boom caused prices to soar, reaching $4.04 a bushel this week. Corn prices should reach new highs over the next five years, according to Keith Collins, chief economist for the U.S. Department of Agriculture.
....Collins predicts U.S. farmers will need to plant 90 million acres of corn by 2010 - nearly 10 million more than now - to meet demand of the rapidly growing U.S. ethanol industry. And that means world markets will need to turn to corn-producing regions such as Latin America to fill the gap if U.S. exports drop.
Latin America's corn farmers are gearing up for such a possibility, snatching up land and blanketing their fields with corn after decades of struggling to compete against cheap, U.S.-subsidized imports. They hope to sell more domestically, and maybe even export more corn.