“There is potential for a backlash against ethanol if the public perceives it as a major driver in food price increases,” Hart says.

The ISU report projects relatively modest food price increases in the 1 to 3% range, with meat facing the largest increases, as a result of increased ethanol production from corn. A widespread 1988-style drought could exacerbate public concerns about the food-fuel trade-off, but Hart doubts that the food price debate will rise to a level that will affect the outlook for the corn ethanol industry.

Similarly, he doubts that environmental concerns will have a big impact on policy or price, although there could be a public relations fallout. “I don't think the debate has reached a crescendo yet,” Hart says. “We could see the debate broaden as the impact of adding more corn acres is realized. We are running a big test case now as we increase corn production.”