Posted March 20, 2014
The average U.S. ethanol plant made $23 million last year, the second-most profitable year on record, according to an article by the Des Moines Register available here.
High corn prices in 2012 resulting from a drought led to record losses for ethanol plants which forced many to close or decrease production.
“Recent headlines about biofuel policies paint a very negative picture of the biofuel industry,” said Scott Irwin, an economist at the University of Illinois. “It might then be surprising to learn that ethanol producers over the last year have enjoyed one of the best periods of profitability ever. As a result, the ethanol production industry is on a much sounder financial footing after being ravaged by drought-related losses in 2012.”
Scott Irwin’s post on FarmDocDaily, “Recent Trends in the Profitability of Ethanol Production” is available here.
The EPA recently proposed lowering the Renewable Fuel Standard, the amount of corn-based ethanol that the federal government would require to be blended into the gasoline supply in 2014. The ethanol industry is opposed to the reduction, saying that it would slow growth.
USDA has projected a 2014 corn crop of about 14 billion bushels on 92 million acres. The projected average for corn is $4.90 a bushel, 60 cents lower than the prior year.
For more information on renewable energy, please visit the National Agricultural Law Center’s website here.
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