Meat and poultry production will fall as producers face higher feed costs, the department said in its monthly crop report. Ethanol fuel, which is blended with gasoline, is consuming 20 percent of last year's corn crop and is expected to gobble up more than 25 percent of this year's crop.

The price of corn, the main feed for livestock, has driven the cost of feeding chickens up 40 percent, according to the National Chicken Council. The council says that chicken, the most popular meat with consumers, will soon cost more at the grocery store. The industry worries the competition from ethanol could cause a shortage of corn.

The average price of corn, unchanged from last month, is $3.20 a bushel, up from $2 last year.

While chicken producer Tyson Foods Inc. posted its first profitable quarter in a year on Jan. 29, executives warned that a dramatic rise in feed costs will raise chicken prices.

"Companies will be forced to pass along rising costs to their customers, meaning consumers will pay significantly more for food," Chief Executive Dick Bond said.

Deputy Agriculture Secretary Chuck Conner said demand most likely will prompt farmers to plant more acres in corn.

Source: The Register-Guard