Forget Food and Fuel: America's Corn Is Worth $125 Billion to This Industry

by Maxx Chatsko (Motley Fool) While the most arguments typically center on the "food vs. fuel" debate, most corn produced in the United States never actually becomes food. Consider that 44% of last year's harvest went to animal feed, another 44% became ethanol fuel, and the remaining 12% went to "other" uses that included food and sweeteners, according to data compiled by the U.S. Department of Agriculture.

That may come as a shock to most people, but we're not done yet. As it turns out, American corn may be most valuable when used by biotech companies.

The industrial biotech sector represented over one-third of the national bioeconomy in 2012. What the heck is that? The bioeconomy is all economic activity generated from products and services that rely on biotechnology. Entrepreneur/writer/investor/thought-leader Rob Carlson, who has the not-so-envious task of tracking the data, has organized the bioeconomy into three parts:

The most visible partnership is with Solazyme, which uses algae to produce cosmetics, drilling lubricants, and vegan protein replacements and food ingredients. Archer Daniels Midland currently leases a 20,000 metric ton per year production facility to Solazyme and supplies the raw corn.

Pressure to increase profitability bodes well for increased investment in Industrial Biosciences, which captured the second highest profit margin (16%) after DuPont's Agriculture segment (24%) in 2014.

A 30 million gallon per year cellulosic ethanol facility in Iowa will begin operating in 2015, while a 50/50 joint venture with BP to produce butanol fuel end up replacing ethanol altogether. Coupled together, the two projects could be just the beginning of a growth-driving effort in next-generation renewable fuels. READ MORE