Corn subsidies expected to soar if ethanol demand falls on lower RFS

In Washington, if the EPA lowers the blending mandate for ethanol and demand shrinks for ethanol as a result, then the government will have to fork out for corn subsidies instead to keep farmers above water. Without ethanol to support prices, corn is seen falling to the mid-$4 per bushel from the record $6.89 seen at the height of last summer’s drought. But if big crops lead to $3.5 to $4 per bushel as seen between 2008-2010, that could mean large outlays for subsidies.