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.
