Unlike Hydrogen, Natural Gas, and Electric. E85 is not even considered an alternative fuel source by the tax code and doesn't receive the same subsidies that those sources receive. So who is eliminating who? If anything the "special interest" for Corn Ethanol is delivering while the rest of the alternatives aren't nearly as popular nor successful. If you think that's competition you're darn right, the Petroleum industry is already extremely competitive with itself without alternatives undercutting it!
The price of Diesel also went up in 2007 when it was switched over to low sulfer. The economy shrunk in 2008. And the price of Gasoline is around $4. The rapid inflation kicking in. I can assure you that that the price corn is a small factor compared to everything else. For beef, Corn can only be used to supplement their diet unlike poultry so there's that to consider. Hay is largely the primary food source for cattle.
Plus we have had record Corn crops for the last couple of years so your argument that supply of Corn is staying the same is just not true.
Reuters Record Corn crop est for 2012. The chart clearly shows Corn crops increasing from 2009-2011. The 2012 is an estimate FYI.
There are no "fuel efficient" or compact FFVs. The 2012 Focus was supposed to be FFV but that was a disappointment. The smallest FFV is the Chevy HHR and the Chevy Malibu, midsize cars that are very common fleet cars. The CAFE FFV credits are a joke, they encourage the manufacturers to only build FFVs for fleet cars, trucks, and SUVs.