Ethanol plants are popping up throughout the Midwest Corn Belt, and may soon start appearing in other parts of the United States. US President George W Bush recently pushed for more alternative fuel use to reduce dependence on oil from the Middle East.

"I think ethanol, rather than China, could be the No 1 factor affecting corn prices in the future," Collins told some 1,500 agricultural analysts, experts and government officials at the USDA's annual Outlook Forum.

China has exported corn in recent years, but in the mid-1990’s, it temporarily imported corn. The change in dynamics and increased corn business for the United States contributed to corn prices hitting $5 per bushel.

China is expected to switch again to importing corn but the USDA does not believe the change will happen in 2006.

US corn exports are projected to rise to 2.0 billion bushels in the 2006/07 marketing year, while ethanol production is forecast to consume 2.15 billion bushels, USDA said.

Corn-based ethanol is now used in only 3 percent of US gasoline, but will consume 14 percent of the US corn crop this marketing year.

USDA projected on Friday that ethanol will consume 20 percent of the crop in the next marketing year that starts Sept 1.

In just the last month, various groups have announced plans to construct 21 ethanol plants in 12 states, said Bill Holbrook, a consultant who has conducted 50 feasibility studies for ethanol plants.

If all the ethanol plants planned for Nebraska come on line, it could raise corn prices, which are roughly about $2 per bushel, by 5 cents locally, Holbrook said.

Collins joked that in the past it was China that was seen as possibly having the greatest impact on US corn prices.