Why Sugar Cane and Not Corn?

Ethanol will lead to energy independence. If all the corn produced in America last year were dedicated to ethanol production (14.3 percent of it was), U.S. gasoline consumption would drop by 12 percent. For corn ethanol to completely displace gasoline consumption in this country, we would need to appropriate all U.S. cropland, turn it completely over to corn-ethanol production, and then find 20 percent more land for cultivation on top of that.
The U.S. Energy Information Administration believes that the practical limit for domestic ethanol production is about 700,000 barrels per day, a figure they don't think is realistic until 2030. That translates to about 6 percent of the U.S. transportation fuels market in 2030. Source: Click Here

The short answer is that corn has already reached it's peak practical production output.  See page 4 of the USDA's Chief Economist, Keith Collins.

Any more and we start to reverse the benefit of corn ethanol because it costs more that we benefit.

Where we are now is just right for corn but we need more ethanol - now it's time for sugar cane to "step up to the plate" and fill the gap between production and demand. 

Full Explaination: To replace all its gasoline (140 bln gal/yr) with ethanol from corn, the USA would need, at present yields of 400 gallons/acre/year, almost 350 million acres of dedicated corn, not including any corn for humans or animal feed. But all the present USA area cultivated with corn is only 75 million acres (FAO, Faostat, 2005). It would require 297.5 million acres for E 85. or 35 million acres for E10.

At present moment, USA needs almost 400 000 bbl/day of ethanol but produces 300 000+ bbl/day. This is just to replace MTBE, as required by law. So, imports and new plants are supposed to fill the gap. But corn and sugar cane are very different.

All energy for the industrial process comes from bagasse burned in high pressure boilers, providing all thermal, mechanical and electrical energy needed, with at least 10% surplus electrical energy sold to the grid. Corn needs natural gas or fuel oil and electricity from the grid to supply its process-energy demands in the factory.

Ethanol yield (gallons/acre) for sugar cane under good tropical conditions is double that for corn. For all those reasons, sugar cane ethanol is seven times more energy efficient; its net energy, expressed as ERoEI, is 9:1 while corn ethanol has an ERoEI of only 1.3:1.

 The substitution of bagasse for fuel oil in the production of ethanol combined with the substitution of ethanol for gasoline avoids the emission of 2.6 tons of CO2.