Resource limits on midwestern ethanol

A commentor recently told me that Minnesota had met its ethanol induced increase in demand for corn without growing any additional acreage. Even if additional acreage is grown, it may end up being tough for corn to meet enough of the ethanol created demand.

America produces nearly half the world's corn, one of the top crops for ethanol, but declining output, surging prices and demand from importers limit how much of the crop can be devoted to use as a motor fuel, an expert in the grain's trade said.
[...]
"We need all the ethanol we can get, but we can't get it all from corn," Pringle -- an expert in hedging, risk management, and basis trading in petroleum, natural gas and grains -- said at a commodities conference in this U.S. southeastern resort.
[...]
Pringle said water scarcity was limiting global production of corn and China was on its way to becoming a major grains importer as industrial development crowds out agriculture.

Midwestern farms and businesses are capitalizing now, but without great strides in yields, corn will not be able to meet the demand for ethanol. On top of that, corn will always be at a competitive disadvantage to ethanol created from sugar, which requires less work to convert. Simple economics says that if demand for corn rises due to ethanol demand, and there is a ceiling to corn production, and there are are cheaper and more efficient supplies, at some point it will become less than cost effective to make ethanol from corn.

I'm glad farmers are capitalizing on the current demand for corn created by the production of ethanol. I just hope that no one thinks that this is going to be a perpetual golden goose for the Midwest.