Time to cool the grain-price rally by reducing federal incentives for the ethanol-fuel industry, which is consuming about 40% of our corn crop.

From The Wall Street Journal:

Demand for corn is so strong—thanks to the expanding appetite of the federally supported ethanol-fuel industry, record-high prices of corn-fed livestock and booming farm exports—that grain traders are worried that even the bumper corn harvest farmers could produce this year might not be enough to rebuild unusually low U.S. corn reserves to comfortable levels.

The price of U.S.-grown corn and wheat has roughly doubled in value from a year ago. Soybean prices are up 50% while cotton prices are up 155%.

The prospects for U.S. crops this year is attracting a lot of attention because food-price inflation is beginning to heat up after rising in 2010 by the slowest rate since the 1960s. The USDA said last week it expected retail grocery prices to climb by 3.5% to 4.5% this year.

Some food executives want Washington to cool the grain-price rally by reducing federal incentives for the ethanol-fuel industry, which is consuming about 40% of the nation's corn crop.