Dooley says the net impact is bad for the food producers he represents. "For most American farmers, they're producing commodities—they're seeing their best years ever. But for farmers that have to feed grains and corn to livestock, they're seeing very tough times.... The [ethanol] policy is having a significant adverse impact on a significant sector of our agriculture, while I admit it is helping some farmers."

These higher costs are also seen in consumers' grocery bills, and that has made ethanol subsidies an issue in Washington. Democratic Sen. Chuck Schumer of New York this month proposed legislation that would end the 54-cent-per-gallon tariff* as a way to stop a spike in milk prices. "There are a lot more milk consumers than ethanol producers in New York. He's hearing an earful from his constituents," Griswold says of Schumer.

*The federal government gives preferential treatment to domestic, corn-based ethanol in the form of a 54-cent tax on imported Brazilian ethanol.

"The bottom line is that it shouldn't be dictated by tax subsidies. It ought to be dictated by market forces," Dooley says. "Then you would have every bushel of corn treated the same. You would allow the market to determine how corn would be utilized. Right now, it's not a level playing field."

But don't hold your breath for changes in Washington's ethanol policies. "People have drunk too much of this ethanol, and they're taking a distorted view of the benefits, and are totally oblivious to the adverse impacts of those policies," Dooley says.