USDA Economic Research Service / by Steven Wallander, Roger Claassen, and Cynthia Nickerson
[Summary] The recent 9-billion-gallon increase in corn-based ethanol production, which resulted from a combination of rising gasoline prices and a suite of Federal bioenergy policies, provides evidence of how farmers altered their land-use decisions in response to increased demand for corn. As some forecasts had suggested, corn acreage increased mostly on farms that previously specialized in soybeans. Other farms, however, offset this shift by expanding soybean production. Farm-level data reveal that the simultaneous net expansion of corn and soybean acreage resulted from a reduction in cotton acreage, a shift from uncultivated hay to cropland, and the expansion of double cropping (consecutively producing two crops of either like or unlike commodities on the same land within the same year).