Dunn said the mandate to use 40 percent of the corn for ethanol could prove a challenge to this year's corn crop because the drought means the United States will be short of corn.

"We were expecting a record crop, but now, if we use what we used last year, we will have no corn into next year's harvest," he said.

The amount of a crop available at the end of a crop year is known as carry-out. Dunn said that as of July 12, the estimated carry-out is 7 percent of the annual corn usage, which accounted for a recent price jump of 50 percent in the price for corn.

"If we go into this harvest with 23 days of inventory of corn, we're going to be squeezed to have enough corn after those 23 days," he added.

The new crop year starts on Sept. 1.

Dunn added that even if there is enough corn to supply producers, simply having the right amount wouldn't be enough.

"The corn isn't necessarily where we need it," he said. "If it's not where you are, and you have animals to feed and no corn, there's a problem."

According to Dunn, the rest of the world will be hit harder than the United States, as people in other countries spend a higher proportion of their income on food.

"They don't have the opportunity to switch from value-added products to ingredients to make their meals," he said. "If you're already spending 40 percent of your income on food and don't eat out, there's no way around it."