Bite Into the Corn Boom

Editor's Note: Jon D. Markman writes a weekly column for CNBC on MSN Money that is republished here on TheStreet.com.

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After decades of decline and disrespect, corn is suddenly the hottest commodity in America.

No longer just an ear to eat during the summer with salt and a square of butter, it's now considered the answer to all the biggest problems of the day, from energy independence to global warming. Politicians praise it, Wall Street supports it, foreigners envy it and farmers can't plant enough of it.

America's got yellow fever, so you just know there's a way for us cynical city folk to make a buck off it.

Check this out: Last week, the federal government reported that U.S. farmers intend to plant 90.5 million acres of corn this spring, the greatest amount of corn acreage since 95.5 million acres were planted in 1944. That's a 15% increase over the 2006 acreage of 78.3 million. Although every farm state has indicated it will grow more corn, the biggest boost will occur in the Southeast, where growers will switch from cotton. Elsewhere, farmers will switch tens of thousands of acres over from wheat and soybeans.

In plain English, there's a mess of corn on the way -- and the boom has a lot of unintended consequences that may not fit well with the primary agenda of those who believe in its role as a "green" alternative to imports of foreign oil and gas.

The Corn Industrial Complex

The driver for the corn frenzy is a huge boost in government support for the production of ethanol, a fuel that can take the place of gasoline in many cars. The Renewable Fuels Association pegs current annual U.S. ethanol production at 5.6 billion gallons but observes that an additional 6.4 billion gallons of capacity is either under construction or in development.