Ethanol

High corn prices are wreaking havoc on Mexico's inflation rate and forcing shoppers to pay more for eggs, milk and tortillas. But they're a godsend to farmers such as Victor Manuel Amador Luna. With world corn prices riding high on strong demand from U.S. ethanol producers, Amador is looking to expand production on his farm about 125 miles east of Mexico City in the state of Puebla. He planted most of his 222 acres with corn this year and would like to buy more land.

The domain of snakes, scorpions and scrub brush since time immemorial, a stretch of desert in northwest Peru could soon become an unlikely generator of jobs and local well-being, thanks to the booming U.S. market for ethanol. At a ceremony this month, energy firm Maple Cos. closed a deal to buy 25,000 acres of unused and heretofore unwanted land near the city of Piura.

As California becomes more aggressive in pushing for cleaner-burning fuels, the state's farmers are expected to plant more corn where they typically cultivate other crops. The increased focus on corn -- from which ethanol is produced -- could mean fewer acres planted for tomatoes, wheat and other crops. That would lead to higher prices for tomato sauce, bread and the feed corn used by ranchers, potentially boosting the prices of turkey and chicken at the grocery store. Gov.

Ethanol will consume more than 30% of the U.S. corn crop annually over the next decade, compared with current usage of about 20%, according to a 10-year government estimate of farm production and prices. The area planted with corn will rise to 90 million acres by 2010, compared with 81.8 million acres last year, as U.S. farmers become suppliers of fuel as well as food, the Department of Agriculture said. Most ethanol made in the U.S. is made from corn.

Near a cluster of purple petunias in a Thousand Oaks greenhouse sprouts a key weapon in the nation's ambitious push into biofuels. The plants don't look like much. They're just tall, spiky shoots of prairie grass. But these stalks are souped-up samples of switch grass, part of an urgent drive toward a new kind of ethanol using plant fibers instead of corn kernels or sugar cane. Ceres Inc.

The ethanol pumps weren't very busy Friday at California's only public alternative fuel depot as President Bush and Brazilian President Luiz Inacio Lula da Silva promoted a pact to increase the production of ethanol and other fuels made from plants. During an otherwise busy three-hour stretch Friday afternoon, only one driver pulled into Pearson Fuel to pump a blend of 85% ethanol and 15% gasoline.

President Bush and U.S. auto executives Monday promoted alternative fuels but did not discuss in any meaningful way their major point of disagreement: government fuel efficiency requirements. Rick Wagoner, chief executive of General Motors Corp., and his counterparts from Ford Motor Co. and Chrysler Group appeared to come away with little.

Over the last two decades, the federal government has built the nation's largest conservation program for private lands by spending billions of dollars to encourage farmers to protect land that is prone to erosion and important to wildlife. Now the Conservation Reserve Program is about to shrink by millions of acres as part of the Bush administration's plans for stimulating corn production for ethanol to reduce dependence on foreign oil.

The Environmental Protection Agency, following a congressional mandate, finalized plans for new standards to boost the use of renewable fuels such as ethanol and biodiesel. Refiners will be required to use at least 7.5 billion gallons of renewable fuel in gasoline by 2012, the EPA said. The rule, authorized in an energy law signed by President Bush in 2005, also requires that 4.02% of gasoline sold or dispensed to U.S. motorists in 2007 be renewable fuel, or about 4.7 billion gallons.

The U.S. meat supply will fall by 1.7 pounds per person this year because demand for ethanol motor fuel has pushed corn prices to their highest level in a decade, boosting livestock feed costs, the government said Tuesday. Beef, pork and chicken output will fall by 1 billion pounds, the U.S. Department of Agriculture said. Overall, it forecast 220 pounds of meat and poultry per American in 2007, down from 221.7 pounds per capita in 2006.