Field corn accounts for the vast majority of the corn crop produced in the United States, and the starch derived from it can be used as the feedstock, or starting material, for ethanol production. By contrast, sweet corn — the kind most often used in canned or frozen foods or eaten fresh — accounts for less than 1 percent of total U.S. corn production. More than one-third of the country's field corn is used to make ethanol, while the rest is used as livestock feed or as a base in a variety of foods, such as corn syrup and flour. Ethanol production began to increase significantly in the early 2000s after becoming a popular gasoline blending component used to increase octane levels and meet environmental standards. Subsequent legislation, including mandates, subsidies and tariffs, increased demand for ethanol dramatically. The share of the U.S. corn crop dedicated to ethanol production increased from 7.5 percent in 2001 to 23 percent in 2008, and is projected to reach as much as 40 percent in 2012 — roughly 38 million acres of the total 96 million acres of planted corn. The production of ethanol is unlikely to decrease in the near future, in no small part due to the U.S. Energy Independence and Security Act passed in 2007. The act requires that 13.2 billion gallons of ethanol in 2012 and 15 billion gallons annually by 2015 be used for transport fuel. However, several states have petitioned the U.S. Environmental Protection Agency for exemptions from the fuel mandate. It is unclear how such waivers would impact food prices, although a recent study conducted by Purdue University estimated that waivers could cause corn prices to drop by as much as $1.30 per bushel. Alternately, according to the study, if ethanol demand is heightened by oil prices topping $120 per barrel, waivers could have little or no effect on corn prices. In other words, blending ethanol with gasoline could become economical independently of mandates and cause ethanol production to continue apace.
