What you have failed to take into consideration is the DDGs (Dried Distillers Grains)which are used for livestock feed and have considerable value.
Originally, corn was grown as a feedstuff for livestock. Modern day science has shown us the way to separate the starches to use for distilling purposes, and still retain the protein for feedstuffs. DDGs are a byproduct of Ethanol, and are an excellent feedstuff.
Farmers are going to grow the corn, one way or another, as feedstuff for livestock. This new process simply removesthe starches to produce Ethanol before feeding the remainder to livestock.
We cannot figure the cost of production into BOTH ethanol and feed. Unless you assign one half (or another percentage) the cost of production to each.
Hmmm.. I wonder if there are any reductions in methane emissions from livestock if the grain is processed first. :)
Starches are feed as well. It may not be the most needed component, but to remove it from the feed would require something to replace the caloric input. (I think)