Ethanol Industry Experiencing Longest Run of Profits Ever
Ethanol Producer Magazine reported on the ethanol industry’s robust profitability, with University of Illinois economist Scott Irwin attributing it to plummeting corn prices surpassing declines in ethanol and DDGS prices. Using an Iowa plant model, profits averaged 93 cents per bushel of corn processed, peaking at $2.55 in Dec 2013. Irwin’s analysis, based on Ag Marketing Resource Center data, highlights sustained profitability. BBI International, a key player in bioenergy events, supports industry growth.
GRAND FORKS, ND–(Marketwired – Mar 20, 2014) – Ethanol Producer Magazine recently published an article discussing how ethanol producers have been enjoying one of their best periods of profitability ever, said University of Illinois economist Scott Irwin in a recent FarmDocDaily post, “Recent Trends in the Profitability of Ethanol Production.”
The ethanol industry has seen four extended periods of plant profitability, with the most recent one being the longest one, starting in spring 2013 to the present. “This has been driven by a drop in corn prices that substantially exceeded the declines in ethanol and DDGS prices,” Irwin said. “As a result the ethanol production industry is on a much sounder financial footing after being ravaged by drought-related losses in 2012.” Using an economic model of a representative Iowa plant, the current period of profitability has seen profits averaging 93 cents per bushel of corn processed, reaching a new high of $2.55 per bushel in early December 2013.
Irwin continued his analysis to look at broader trends in estimated ethanol plant profitability, looking at annual profits net of variable and fixed costs and the return to equity holders. He built his analysis using the representative Iowa ethanol plant model developed by the Ag Marketing Resource Center to track the profitability of ethanol production. For his analysis, Irwin updated some model assumptions using data from the 2012 and 2013 benchmarking studies done by Christianson & Assoc.
About BBI International:
Founded in 1995, BBI International produces globally recognized bioenergy events and trade magazines. In addition to the International Biomass Conference & Expo and its allied regional events, BBI owns and operates the largest, longest-running ethanol conference in the world — the International Fuel Ethanol Workshop & Expo (FEW) — and the National Advanced Biofuels Conference & Expo. The company publishes Biomass Magazine, Ethanol Producer Magazine, Pellet Mill Magazine, and Biodiesel Magazine, as well as a number of ancillary products including maps, directories, e-newsletters and other web-based industry resources.
Source Link : https://uk.news.yahoo.com/finance/news/ethanol-industry-experiencing-longest-run-210230390.html
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