Let’s backtack a little. The reason we have corn (I’m talking about the 98% feed corn that Rumor noted, not the sweet corn people eat off the cob) is that it’s very good for feeding livestock – beef, chicken and pork. Livestock producers want lots of it, and they want it cheap. And because corn only grows well in a few parts of the world, especially the U.S., it has a very good market for export.
Corn farmers want to grow lots of corn. Unfortunately, the cost of production is pretty close to what the market will bear in terms of price. If the cost of corn gets too high, then the cost of meat gets too high, livestock producers cut back on their herds and the export customers look to buy corn from other countries.
In other words, if the price of corn gets too low, farmers can’t make a profit and go out of business. If the price of corn gets too high, the market for corn disappears and farmers go out of business.
You can’t just start and stop a farm, or a livestock operation. So the federal government has decided it’s in everyone’s best interest to keep the price of corn fairly stable, so the farmers will want to plant a crop, and the livestock operations will stay open, regardless of whether this year’s crop was good or bad.
And that’s why we have agricultural subsidies in the first place. The idea is to have the taxpayer put in a (relatively) small amount of money up front in return for a stable and relatively cheap food bill on the back end.
As long as there’s corn, there’s a market for it. Roughly 40% of the corn grown in the U.S. goes directly to feeding U.S. livestock. Ethanol production uses another 30%, exports use up 15-16%. High fructose corn syrup only accounts for about 3% of use. But trying to discuss the relationship between farmers, export policy, ethanol subsidies and the pure food movement gets really complicated.