Ethanol's rise prompts worries of a corn crunch

"We're monitoring the situation carefully," says Gregg Doud, chief economist for the National Cattlemen's Beef Association. Corn residue from ethanol production is a good feed supplement, but because ethanol removes starches, it does not meet all cattle nutrient needs, he notes.

Many don't see a problem ahead for the corn supply. As prices rise, more acres now devoted to other crops will shift to corn instead, experts say. New technology and genetically modified strains of corn are already producing higher crop yields.

"We've never said the ethanol industry would lead the US to energy independence, but it's part of it," says Jon Doggett, vice president of public policy at the National Corn Growers Association. "If we get price spikes, our growers are going to plant more to meet that demand."

"Everyone is aware of the limits on corn-based ethanol," says Matt Hartwig, a spokesman for the RFA. "That's why nearly everyone involved in this is also working on cellulosic [ethanol]. We're conscious of that upper threshold."

If cellulosic ethanol, which is made from nonfood crops such as switch grass and crop waste, becomes competitive, it could mean a dampening of demand to convert corn to fuel.

Until then, ethanol's larger share of the US corn crop could mean less US corn available for export, crimping some developing nations' ability to feed their poor – especially in years when corn-crop yields are sub par, some warn.

"Cars, not people, will claim most of the increase in world grain consumption this year," writes Lester Brown, president of the Earth Policy Institute, an environmental think tank.

Though global demand for food is expected to almost double in 50 years, consumption of transportation fuel is expected to grow even faster, Dr. Hill's study reports.

"The question of food versus fuel is a false choice, because the answer is we can do both," says Mr. Hartwig.

Others say the threat is not acute due to flexibility and reserves in the global agricultural supply system and many alternatives to corn and other bio-fuel grains for making fuel.

"Any rise in price or reduction in corn availability from the US will certainly affect people in developing nations," says Siwa Msangi, a research fellow at the International Food Policy Research Institute in Washington. "But we don't believe it will become a dire situation."

These questions don't worry some corn farmers including Ken McCauley. He and his neighbors near St. Joseph, Mo., are partners in a new ethanol facility that goes online in January.

To them, ethanol is a breakthrough that means making a profit instead of just breaking even. "You hear a lot of talk about there not going to be enough corn, but we've created this new demand, and we're actually helping meet the energy security needs of the country," he says. "We'll grow enough for everyone."

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