Politics will fuel U.S. ethanol plants: Agrium CFO

(All prices in U.S. dollars except where noted.)

By Roberta Rampton

WINNIPEG, Manitoba, May 14 (Reuters) - The political clout of U.S. farmers means ethanol production is unlikely to decline from current levels despite growing concern about using corn to make biofuel, a top executive of Agrium Inc (AGU.TO: Quote, Profile, Research) said on Wednesday.

Strong support for the ethanol industry from U.S. farm states combined with soaring oil prices will trump calls for the U.S. government to cut back on its biofuels mandate, said Bruce Waterman, chief financial officer of Agrium, the largest U.S. retailer of fertilizer, seed and chemicals.

"In the U.S., we're not particularly concerned about the existing ethanol plants failing to continue to produce," Waterman told a conference in Saskatoon, Saskatchewan.

"We just don't think particularly in an election year ... that any U.S. politician is going to propose to wipe out 5 percent of the U.S. gasoline supply," Waterman said.

"How fast it grows in the future, I guess that could be questioned, but the existing ethanol production, in our view, will continue," he said.

Rising food prices and shortages in some parts of the world have led to calls for the United States to cut back on ethanol production, which absorbs about a third of its corn crop.

Sen. John McCain, the Republican presidential candidate, and other U.S. politicians have said they would like to see ethanol growth curbed.