Ethanol producers acknowledge they've increased demand for corn but say it's not enough to affect food prices.
Farmers and ethanol producers have braced for what they expect could be widespread criticism as corn prices are rising rapidly and other food costs are following. A similar increase five years ago generated a storm of criticism, with many in the food industry blaming the ethanol industry for buying up corn that could be used for food and faulting farmers for capitalizing on the higher prices. Many farmers and ethanol producers worried then that the complaints would force a change in agriculture and energy policies and fewer subsidies for their industries, but prices came down and that didn't happen. Now, they're concerned again, as corn prices rose even higher last week following an announcement that U.S. farmers are planting the second-largest corn crop since 1944, but it won't be enough to meet growing worldwide demand. Corn has traded at more than $7/bu. this month, more than double last summer's $3.50, and many traders say it could pass the record of $7.65 set in 2008.