Originally posted by LawVol:
...The rise in price is due to the rise in demand: as demand increases prices goes up and as demand decreases, prices go down. Right now, we've had a spike in demand for corn that does not correspond with production. I would think that if the demand continues, corn growers will increase their production thereby decreasing the overall price....
...that farmers are going to be able to vastly increase even more corn production. It's already happened (for the 2007 planting season; see below), and like the article points out, we've got corn running at over $4.50 a Bu. And nobody grows more corn than the US.

Just some numbers:
1) For 2006, the US grew 10.535 billion bushels of corn. The 2006 crop ended up 210 million bushels smaller than the November 2006 forecast and 579 million smaller than the September 2006 forecast.
2) In September, 2007, The USDA forecasted the 2007 U.S. corn crop at 13.308 billion bushels, 254 million (1.9 percent) larger than the August forecast and 2.773 billion (26.3 percent) larger than the 2006 crop.
3) Final 2007 crop numbers will be issued in January, 2008.

A good friend who farms 2300+ acres in central IL says that in the $3.55 to $3.75 per Bu. price range for corn, farmers start to make a pretty good buck. Costs vary by region, but the land they farm is highly productive, so that's their experience this year.

Also, one other point made to me is that the Congress just upped the Renewable Fuel Standard (recently passed 2007 Energy bill) to use a min. of 36 billion gal. of "Biofuels" by 2022, which is more than a 500% increase of the 2005 Standards. "Biofuels" = Ethanol, which here in the US, comes almost exclusively from corn. So there's going to be even higher demand, mandated Congressionally.

September, 2007 exports of U.S. corn during the current marketing year were projected at 2.25 billion bushels, 130 million larger than exports during the 2006-07 marketing year and the largest in 18 years. Info. From a Univ. of IL Cooperative Extension Researcher

The lead article posted has an obvious slant to it (that's their business, so they got to push it hard), but the Economist article reminds me of a "Whistling past the graveyard" type of article, which is akin to saying "Well, if everything goes perfectly, we'll all be fine". Doesn't mean it's going to happen that way.