USDA approved the variety after reviewing environmental and risk assessments, public comments and research data from Monsanto.

Corn is the most widely grown U.S. crop and farmers grew 91.9 million acres of the feed grain this year, the second-largest area since World War Two.

In its 2009 petition for approval of its GM variety, Monsanto said 40 percent of crop losses in North America are due to sub-optimal moisture.

In a statement, Monsanto said it planned farm trials in the western U.S. Plains in 2012 to demonstrate the variety for growers and to generate data that will help guide Monsanto's commercial decisions.

"Our drought system is designed to help farmers mitigate the risk of yield loss when experiencing drought stress, primarily in areas of annual drought stress," said Hobart Beeghly, U.S. product management leader.

The drought-tolerant trait was part of a collaboration with the German chemical company BASF.

The major U.S. area for adoption of drought-tolerant corn would be the Plains, which produce one-quarter of the U.S. crop, Monsanto estimated, as well as similar dryland regions of Africa, Europe and Latin America.

USDA announced the variety, known as MON 87460, "is no longer considered a regulated article under our regulations governing the introduction of certain genetically engineered organisms."

(Reporting By Charles Abbott)

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