WASHINGTON - The Food and Agricultural Policy Research Institute (FAPRI), a Missouri think tank, is projecting a 10% drop in U.S. ethanol production next year, following the worst drought in 50 years that has brought record high corn prices, Reuters reports.

According to FAPRI, "Higher ethanol prices contribute to sharply reduced ethanol exports and increased imports, but domestic ethanol consumption declines by just 2%."

FAPRI is forecasting ethanol output to fall to 12.4 billion gallons next year, compared to 13.8 billion gallons this year. Exports would drop to 505 million gallons, versus nearly 1.1 billion gallons this year.

Governors of seven states have asked the EPA for relief from the ethanol mandate, arguing that the Renewable Fuels Standard is disrupting livestock production and causing economic harm. The EPA is weighing the request and has asked for public feedback.