Corn Ethanol Prices Squeeze Profit | Global AgInvesting

Corn Ethanol Prices Squeeze Profit

Corn Ethanol Prices Squeeze Profit

 

Last summer U.S. prices for ethanol and corn reached an imbalance in that production costs exceeded revenue at simple ethanol plants according to the U.S. Energy Information Administration.  Simple ethanol plants are unable to recover corn oil.  Plants with recovery capability are able to earn more revenue and usually have higher profit margins than plants without. Profit margins at plants capable of recovery have been 0.15-0.20 cents per gallon higher than simple plants and the imbalance has caused several simple plants to shut down temporarily, with at least 20 idled by January 2013. Some plants are looking to develop corn oil recovery systems or are switching to the production of butanol, or are integrating cellulosic feedstock such as wood waste or corn stover that then allows their products to qualify as advanced biofuels under the RFS.

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