Wait, let me correct you, because 5 years ago, you would be right. But under Obama, and the latest Farm Bill that was passed, corn producers lose subsidies when selling corn being used for food consumption, and still get subsidized if the farmer sells to an ethanol plant.
Where I live, there are 2 very large ethanol plants with which I conduct business with (not related to what they do, I handle benefits for their employees), but I have had several lengthy discussions with them about their business simply because it interests me. Corn for ethanol production is still heavily subsidized, because without it, it would fold up like a dirty shirt, plants and all. Corn based ethanol, and it's production, would collapse without government subsidizing it. But under Obama administration, they have reduced corn subsidies on producers selling corn for food. This is a fact.
The regulation has nothing to do with subsidies. There is only so much corn harvested in this country every year, and less corn harvested in drought years. But the regulation mandates that 40% of all domestic production be set aside and sold for the production of ethanol. Imagine taking 40% of your income and not being able to use it for what you need it most for. For commodities, this drives prices up, which we see. It also means there is 40% less corn to produce food products or feed cattle, which is why food prices have gone up, and beef has gone up almost 300% in 4 years.
These types of regulations effect the middle class disproportionately. My cousin in law is also a commodities trader. He buys and sells commodities. He tells me that the regulation has a severe impact on corn prices. Now, it's good for the farmers, because the prices are so high. It's good for the ethanol producers because they're highly subsidized. But it hurts consumers. This isn't the ONLY reason corn is $6.50.
Add in the COST of raising corn as well. Yes, costs go up, but alot of that COST has to do with other regulations as well. Emission regulations, permitting, crop insurance regulations, the cost of farm fuel and new taxes imposed on farm grade diesel, etc, all play a role. So, if it's more expensive for the farmer to raise corn, you can guess how that effects the price as well. Mix in a drought, and all of a sudden there's a shortage in corn supply, higher prices still.
My point is, lots of things effect the prices of commodities, and some of those things we cant control. We can't control when it rains or how much or how little it rains. But we CAN control regulations that effect the prices of commodities that end up hurting the middle class.