The reason corn is used for ethanol is that it is cheap to produce and there is a lot of it. Since the early 1900s the US agricultural problem, with the exception of a very few years has been an excess production capacity. There are not enough paying customers for the product. The farmers can and generally do produce more grain than the world will buy. The precept ion of is that the last year or so has been an exception, however, the current price paid to the farmer indicates that is probably still true. Very few farmers sold grain at the high prices. The prices did not go up last year until well after the harvest when most farmers had sold theirs to avoid storage prices. The current prices are less than half the peak levels.
The ethanol plants that are squawking about high prices are those that bought high priced corn futures. If they could buy at current prices, they would be making out like bandits.
As land owner, as far as I can tell, the only current “government subsidy” we get seems to be on the mandated crop insurance. None on the production expenses and certainly none when we sell the grain.
As to the effect on store prices vs grain prices: When I was in high school & wheat was $2/bushel, the $ of wheat in a loaf of bread was $0.04. Do the math with the current five dollar wheat.
Also note that an individual farmer's cost of production has no real effect on the price he rec eaves for his product. He can only make a living when the market offers some value greater than the cost of his operation.
It's what happens to the corn sold for fuel that becomes expensive for Americans.
It's just too bad that excrement isn't profitably and inoffensively converted into fuel for autos as there would be an overabundance of the stuff just from the capitol of our nation.