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In the U.S., corn usually means Iowa. In 2005, the state produced more than 2 billion bushels of corn. That's nearly 20 percent of the national crop and more than any other state—and many other countries—managed to produce.
But the nation's leading corn producer is increasingly trying to transform its cash crop into liquid gold: ethanol. By the start of this year, Iowa had produced more than a billion gallons of ethanol, and its production capacity is slated to expand by hundreds of millions of gallons. The state is turning corn into fuel so fast that by the end of next year, Iowa will actually suffer a crop shortage.
"Sometime by the end of 2007, Iowa's going to need to import corn," said Dan Basse, president of AgResource, an agricultural economics firm in Chicago.
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Ethanol is produced by the fermentation and distillation of starches and sugars in plants; in the U.S., it is produced primarily from corn. According to its fans, ethanol is a miracle biofuel that will help save drivers dollars at the pump, stave off global warming, and end America's dependence on Middle Eastern oil.
Now, however, a vocal group is beginning to warn that the escalating demand for the biofuel will soon run afoul of the limited supply of corn, causing a 21st century food fight with global ramifications.
"There are whole new companies being created just to build ethanol distilleries in this country," said Lester Brown, president of the Earth Policy Institute, an environmental research organization. "I don't think anyone's adding up the amount of corn it's going to take to run the distilleries that are being planned."
The amount of ethanol produced—and the amount of U.S. corn used in manufacturing—has increased dramatically in the last five years. In 2005, the U.S. produced nearly four billion gallons of ethanol—more than twice the amount produced in 2000. The continuation of this growth is federally mandated: The 2005 Energy Policy Act calls for a near doubling of that figure by 2012.
Ethanol has many advocates: Farmers love it as a steady and growing market for their corn. Big food processors, like Archer Daniels Midland and Monsanto, are behind it because it's much more profitable than turning corn into livestock feed or sweeteners. Businesses and investors back it because a $100 million investment in an ethanol distillery can be made back in just one year. Overall, there's simply much more money to be made in ethanol than in feed, which is currently the largest consumer of corn in the U.S.
"The energy market just dwarfs the agricultural market in terms of value," said Wallace Tyner, an agricultural economist at Purdue University. "If Exxon chose to, they could take less than one year's profit and buy the entire corn crop."
In fact, the energy market is so large—and the hunger for biofuel so insatiable—that the USDA predicts the nation's planted corn acreage will grow as ethanol production drives up demand.
The government is hoping that improvements in genetic engineering will help increase corn yields.
"But it's still not enough," Basse said. "Someone's going to get squeezed."
In the U.S., corn is primarily used for feeding livestock, the cost of which is substantial: 40 percent of the expense of poultry production comes from feed. If an increasing percentage of the U.S. corn crop winds up in ethanol distilleries, the price of the remaining corn will rise, forcing livestock producers to shell out more money for feed.