Local farmers: Who's getting rich; who's feeling the pinch? And how is ethanol affecting your trip to the grocery store?

David Grant is straddling the ethanol fence, and it's a surprisingly comfortable place to sit.

"It's a win-win situation, in my opinion," said Grant.

Grant's Farm produces corn and beef cattle. It's diversified, and Grant says you have to be these days.

"It's kind of hard to put all your eggs in one basket," explained Grant.

"A lot of our beef producers, especially north of I-70 are kind of balancing both sides of it and taking advantage of some of the ethanol opportunities that are out there," said Jeff Windett, Executive Vice President of the Missouri Cattlemen's Association.

But, if you're only producing beef, no corn. The increased price hurts.

"Seeing this raise their total cost of production to a point where its critical whether they make a profit or not," explained Windett.

But, the Corn Growers Association says corn farmers have been struggling to make a profit for decades.

"They've been getting two dollars bushel for their corn since all the way back in the 60s. 'Til just recently, just over a year ago, they've still been getting two dollars a bushel," said Ethan Taylor, E-85 Coordinator from the Missouri Corn Growers Association.

"So, whenever livestock producers talk to us about profitability we say, hey remember corn farmers have to make a profit too," said Gary Marshall, Chief Executive Officer from the Missouri Corn Growers Association. And right now, they are.

"The ethanol industry... basically the corn prices are actually high enough now that corn farmers can actually make their own money, make their own profits, and not be reliable on subsidies from the goverment," said Taylor.

Some farmers are selling their corn directly to local ethanol plants, like the one in Laddonia.

"They get weighed. Come in dump their corn; come back around - weigh empty, sign off on their contract, and they'll get payed tomorrow," Robin Venn, General Manager of Poet Biorefining.

1,000 local farmers - within a 50 mile radius - provide all of the plant's corn.

"It's giving the farmer a better life, I believe. Keeping farming people employed; getting more value for their product; and providing more and more input into the local economy," said Venn.

The Laddonia plant also produces an ethanol bi-product, dried distiller's grains. It's one way beef producers can feed their cattle and save money.

"It's a lesser cost; its probably not quite as good as what the raw corn is, but it still fits good into the ration," said Jeff Windett.

Ethanol obviously affects the farmers. How does it affect you?

Many argue it's to blame for rising food prices. The corn growers say, not so fast. Marshall says there's only four cents of corn in a box of corn flakes. Double the price of corn - that's only eight cents. There's one penny in a can of beer. Double that - two cents. And there's 1.6 cents of corn sweetener in a can of soda. That puts it at 3.2 cents higher. So, Marshall says if food prices go up, don't blame corn.

"We believe food companies are really using corn as an excuse to increase the price of food to consumers. It really has nothing to do with corn. It has to do with the profits for the food companies," explained Marshall.

Despite the mountain of effects, positive and negative, Taylor says the ultimate goal behind ethanol is to reduce dependency on foreign oil.

"The corn farmers produce the corn here in Missouri. We produce the ethanol here, and we sell it to stations here. And to you the consumer here in Missouri. That fuel makes it full circle here in Missouri, and that money stays here in Missouri," explained Taylor.

As a Missouri farmer, Grant hopes the ethanol craze is not just a passing fad.

"I just hope it stays around for awhile. They keep trying to find other ways to do it. It almost seems like they don't want corn to be what fuels the cars. They keep saying there are better alternatives, and maybe there are. I don't know. But, they sure are looking hard," said Grant.

Researchers are working on other ways to prodcuce ethanol. One way is cellulosic ethanol. This essentially takes all parts of the corn, not just the kernel, and turns it into ethanol.

Another option being researched is turning switch grass into ethanol.

Next week, we'll continue "The Facts of Fuel" series with a look at alternative forms of transportation - like the electric car.