Corn US farm 2012
A corn farm in the United States Reuters

As harvest time approaches for the largest U.S. corn crop in 77 years and the ubiquitous grain's price stands at an almost three-year low, ethanol makers like Archer Daniels Midland (NYSE:ADM) are preparing to sell more of the corn-based additive into energy markets.

Illinois agriculture company ADM, the largest corn processor and ethanol producer in the U.S., said that this year’s record U.S. corn harvest would provide “better blending economics” that will increase demand for ethanol as refiners try to meet cleaner-fuel mandates in the U.S., Platts reported Tuesday.

"We are very optimistic for 2014 and 2015. The incentive [to use more ethanol] with a large corn crop is there," Juan Luciano, ADM's chief operating officer, said. "Consumers are very hungry for a reduction in gasoline prices," he added.

Most gasoline sold in the U.S. has ethanol in it, but the exact amount differs by region, according to the U.S. Energy Information Administration. In general ethanol does not exceed 10 percent of the gasoline mix (E10). But ADM believes the record-level corn harvest, to begin in September, will lead to higher consumption of fuel grades E15 (15 percent ethanol) and E85 (85 percent ethanol).

But the higher grades would mean costly infrastructure development for producers, and among consumers, there's fear that E15 and E85 grades negatively affect engine performance.

The U.S. government has mandated the use of 13.8 billion gallons of corn-based ethanol in 2013, and this will grow to 14.4 billion gallons next year, and 15 billion in 2015.

Refiners and blenders have struggled to meet the minimum ethanol consumption levels required, and that has raised the price of ethanol. The government is trying to lower emissions with cleaner renewable fuels.

“The market will provide the incentives for higher consumption of E15 and E85 if these products are priced correctly," Luciano said. "We believe the companies [supplying gasoline] have the option to blend more and there's enough elasticity in the system.”

Patricia Woertz, ADM’s CEO, said that the biggest inventive to mix ethanol into gasoline would be economics, not a mandate from the government.