The effects of transgenic corn use and federal biofuel policies on state-level cropping patterns in the US Corn Belt region are investigated using state-level data from 2000 to 2019. During this time, producers moved away from diverse cropping patterns and toward simpler rotational practices. Empirical evidence indicates that the intensification of corn acres planted was positively impacted by the spread of genetically modified (GM) soybeans—used as a proxy for GM corn for biofuel usage—but the effects of biotech advancements on producer planting decisions vary across states. This suggests that future policy changes affecting corn production decisions at the farm level will also be heterogeneous across states.

While agricultural economics literature has become rife with the economics of ethanol production and cellulosic ethanol feedstock production, little has been written about capital investment necessary for the magnitude of industry development mandated by the Energy Security and Independence Act of 2007. Financing the development of the ethanol industry to meet the 36 billion gallon production capacity set for 2022 (with 16 billion gallons from cellulosic ethanol) will require capital investments exceeding $100 billion for production facilities, plus extensive investment in feedstock establishment and transportation/handling infrastructure. Federal support associated with political mandates does not address all of the financial issues related with the development of the industry in such a relatively short timeframe. This article addresses the challenges associated with and the conditions necessary for achieving the private investment needed to expand the ethanol industry in the United States.