Development of new ethanol plants in the USA is grinding to a halt, according to a recent report by Jon Birger in CNN Money’s Fortune Magazine. Cargill has announced it is scrapping plans for a $200 million ethanol plant near Topeka, Kan. and the bankruptcy sale of an unfinished ethanol plant in Canton, Ill. was approved in early March, says the article.

Plans for as many as 50 new ethanol plants have been shelved in recent months, as Wall Street pulls back from the sector, says Paul Ho, a Credit Suisse investment banker specializing in alternative energy. Financing for new ethanol plants, Ho says, “has been shut down.”

The reason for the slowdown is runaway corn prices, notes the report. Spurred by an ethanol plant construction binge, corn prices have gone stratospheric, it says, soaring from below $2 a bushel in 2006 to over $5.25 a bushel today. As a result, it’s become difficult for ethanol plants to make a healthy profit, even with oil at $100 a barrel.