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The The Iowa Corn Promotion Board (ICPB) and the Iowa Renewable Fuels Association (IRFA) today held a joint press conference and photo-op to dispel claims that ethanol and higher field corn prices result in higher popcorn prices for moviegoers. The “Popping the Popcorn Propaganda” event dramatically illustrated this point by displaying what $5 will buy you at a movie theater versus $5 from a farmer.

“The ‘blame ethanol’ game has gotten completely out of control,” stated IRFA Executive Director Monte Shaw. “From a consumer standpoint, for $5 you can buy 1 tub of popcorn at a movie theater or 38.5 pounds of popcorn from a farmer, which, when popped fills nearly a dozen 33-gallon trash bags.

“From a farm standpoint, in 2006 the farmer received about 1.4 cents for the corn in that $5 tub at the movie theater. In 2007, that same farmer will receive about 2 cents to fill that tub. How can an increase of 0.6 cents to the farmer justify a price hike to movie goers or crazy headlines in the news media?”

To illustrate the point, IRFA intern Paul Brees spent 6 hours popping 38.5 pounds of popcorn – the amount you could buy from a farmer for $5. During the press conference, the 12 bags of popcorn stood in stark contrast to the one small bag of popcorn from the movie theater.

“We had a very visual example today of what actually goes to the farmer. You can use this same example when you talk about other products made with corn. For example, a six-pack of soda includes just 6 cents of corn sweetener, or only 1 penny per can. If your soda at the store is going up more than 1 cent per can, then you have to wonder where the rest of that increase is going,” said Craig Floss, CEO for Iowa Corn. “We know that it is not making it to our corn growers, so to blame them for the increase in prices at the grocery story is simply not right.”

Right now, 98 percent of the ethanol produced in the U.S. is made from corn. But in order to meet the 2005 federal mandate of 7.5 billion gallons of ethanol a year by 2012… and then President Bush’s lofty goal of a 20 percent reduction in gasoline usage by 2017… and possibly now the U.S. Senate’s latest proposal of 36 billion gallons of biofuels by 2022 (with 21 billion gallons coming from something other than corn), it’s obvious there will have to be something other than corn fueling the green fuel. That’s where government incentives come in.

This article in Missouri Ruralist says state and federal subsidies that helped jumpstart much of the current growth will be instrumental in finding an even better source than corn to make ethanol:

While Congress is backing its standards with increased funding for renewable fuels research and development, the administration is taking steps as well. The Department of Energy announced this summer that it will spend $375 million in Tennessee, Wisconsin and California to develop non-food crops into biofuels. The department is already investing another $385 million in six alternative-feedstock ethanol plants in California, Florida, Georgia, Idaho, Iowa and Kansas.

The article goes on to point out that government incentives helped ethanol double its output since 2003. It seems to reason that those same kind of incentives will spur the next feedstock’s growth.

Recent rain in the Midwest has helped the corn crop rebound and led to lower corn prices, according to a Forbes article.

After as much as 6 inches of rain in eastern Iowa and western Illinois, much of corn crop received relief after a dry June.

In mid-June, a little more than half of Illinois’ corn crop was in good to excellent condition, according to USDA’s crop reports. Last week, that figure was 81%. In Iowa, it was still healthy at 63%, held down by dry conditions in the western end of the state.

Corn prices hit $4 a bushel in February, but cash-market corn has lowered to around $3.

“This has really helped to increased the profitability for ethanol producers,” said Rick Kment, an ethanol analyst with DTN, an Omaha, Neb.-based agricultural market information company.

“A meaningful decline in corn prices would suggest the potential for improving profitability and drive ethanol stock prices up,” Citibank analyst David Driscoll, who expects corn prices to level off at $2.75 a bushel in the long term, wrote in a note to investors.