CoBank Reports A Strong Q3 For US Ethanol Industry
A healthy summer travel season and attractive fuel ethanol prices helped support very strong fuel ethanol production volumes in the U.S. during the third quarter, according to CoBank’s latest quarterly research report, released Oct. 11.
Production averaged 16.1 billion gallons on an annualized basis during the third quarter, up from 15.4 billion during the second quarter.
According to CoBank, third quarter profitability exceeded 50 cents per gallon, up from 20 cents per gallon during the third quarter of 2022. That increase in operating margins reflected a 23 percent decline in corn feedstock costs and a 59 percent reduction in natural gas operating costs as the market impacts of the Ukraine invasion fade, according to the report.
Strong domestic demand for fuel ethanol helped reduce stocks, which CoBank said are now approximately 17 below the March 2023 peak. The report predicts that continued steady demand and tight ethanol stocks will support fuel ethanol prices into the fourth quarter. Near-term feedstock availability is expected to be favorable for ethanol producers, impacted by lagging corn exports that are exacerbated by low water levels in the Mississippi River.
CoBank also addresses fuel ethanol exports, noting that export levels for the first seven months of 2023 were down more than 12 percent when compared to the same period of last year. The report primarily attributes the decline to reduced exports to Bazil, which is experiencing an estimated 5 percent increase to domestic ethanol production.
A full copy of the quarter reports is available on the CoBank website.
Source Link: https://ethanolproducer.com/articles/cobank-reports-a-strong-q3-for-us-ethanol-industry
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