Former Ambassador to China Jon Huntsman is making a "mistake" to skip the Iowa caucuses, Sen. Charles Grassley (R-Iowa) said Tuesday.

Grassley, the dean of Iowa's congressional delegation, called into question Huntsman's assumption that because he opposes subsidies for ethanol, he couldn't compete in the caucuses, the first nominating contest of the 2012 cycle.

"I think everybody ought to come to Iowa because it's retail politics and you show the extent to which you can converse with the average person," Grassley said at the Capitol. "I think it's a mistake not to come."

Huntsman told the Associated Press last week that he's very unlikely to compete in Iowa, in no small part due to his opposition to ethanol support. Huntsman, the former governor of Utah who's still weighing a bid for the Republican nomination, is more likely to focus on the subsequent primaries in New Hampshire and South Carolina.

Grassley noted that Sen. John McCain (R-Ariz.) competed in Iowa in 2008 despite having voiced opposition to the subsidies that cycle. And the Iowa Republican said that the state's voters aren't just about ethanol, either.

"John McCain wasn't afraid to compete in Iowa, and he was against ethanol at that time -- and still is. And he still campaigned in Iowa because Iowans are not concerned just about ethanol," Grassley said. "Now they are concerned about ethanol, but they're more concerned about jobs, more concerned about the economy, more concerned about healthcare reform, more concerned about the legacy of debt that we're leaving to our children and grandchildren."

Other Republicans seeking the party's 2012 nomination have also voiced skepticism of ethanol. Former Minnesota Gov. Tim Pawlenty (R), who launched his campaign in the state and has focused a great deal of effort on winning the caucus, called for the gradual phasing out of the subsidies. By contrast, former Massachusetts Gov. Mitt Romney (R) said he supports the subsidies during a recent Iowa visit.

His opposition to the subsidies shouldn't keep Huntsman away, Grassley said. He added that he hadn't ruled any Republicans in or out for 2012, in terms of an endorsement.

"I would think that, regardless of Huntsman's view on ethanol, he would still be welcome in Iowa," he explained.