U.S. agricultural processor and ethanol producer Archer Daniels Midland Co said on Wednesday it expected the U.S. ethanol blend rate to rise to 12 percent by 2010, up from the current allowed maximum of 10 percent.

A higher percentage of ethanol in gasoline will be necessary to meet the country's renewable fuel standard, said Steve Mills, ADM's chief financial officer, speaking at the BMO Capital Markets' Agriculture, Protein, and Fertilizer conference in New York City.

Ethanol supporters have petitioned the U.S. Environmental Protection Agency to consider increasing the ethanol blend rate as high as 15 percent, but a step-up increase may be more likely.

Supporters argue that increased blend rates are needed to accommodate rising federal production mandates that require 12.95 billion gallons of biofuel to be blended into the nation's fuel supply in 2010 and 36 billion gallons in 2022.

The EPA said in April it would take a year to complete government testing on whether a higher percentage of ethanol could be blended with gasoline without harming car engines and is currently seeking public comment on the issue.

ADM also said on Wednesday that it was open to acquiring existing ethanol facilities from bankrupt biofuels makers, but added that it would be very selective with any purchases it makes.

It really would have to be a great fit at a great price for us to consider it, Mills said.

The high cost of corn, which ethanol makers convert into the biofuel, coupled with a steep drop in fuel prices from last year's record highs have squeezed profitability of the ethanol sector and forced several producers into bankruptcy.

ADM, the second largest ethanol producer in the United States, bid on some assets of bankrupt ethanol producer VeraSun Energy Corp VSUNQ.PK in a March auction, but did not acquire any facilities.

Another ethanol producer, Pacific Ethanol Inc warned on Tuesday that it would need to file for bankruptcy protection if it could not soon restructure its debt after its first-quarter sales fell by nearly half.

(Reporting by Karl Plume; Editing by Lisa Shumaker)