Farm Industry News Blog

Ethanol facility restarts, production on the rise

Several ethanol plants that had been idled are resuming production. This, plus stronger ethanol prices, improved margins, and greater efficiencies (thanks in part to improved corn hybrids and enzyme technologies) have raised optimism for the ethanol industry.

 

News of ethanol plant restarts and improved profitability are building optimism about the state of the ethanol industry. Plants that had been temporarily idled are now back in production, said Todd Sneller, administrator of the Nebraska Ethanol Board, in a news release issued today by Ethanol Producer Magazine (www.ethanolproducer.com/).

 

POET, for example, resumed production at its Macon, MO, plant after temporarily idling it in early February. During the down time, POET began introducing approximately $14 million in upgrades in Macon. In March, Valero Energy Corp. restarted all three of the plants it idled last year. Sneller added that two Abengoa Bioenergy ethanol plants were restarted in February after sitting idle for about a month.

 

Ethanol Producer also reported that U.S. ethanol production rose to a two-week high as corn costs eased. Ethanol production averaged 853,000 barrels per day, a 21,000-barrel per day increase from the week before, according to the latest U.S. Energy Information Administration (EIA) data.

 

In its Short-Term Energy and Summer Fuels Outlook, the EIA expects ethanol production to recover to pre-drought levels after the middle of 2013. Ethanol production is expected to average 850,000 barrels per day for the year and increase to an average of 920,000 barrels per day in 2014.

 

What’s more, an Atlas Markets daily price e-mail indicates improved margins at ethanol plants. On April 24, the ethanol/corn crush for the May contract was at 24 cents, June contract 17 cents, 23.5 cents (third quarter) and 7 cents (fourth quarter).

 

Sneller pointed to strengthening ethanol prices, reduced feedstock costs, export demand and strong demand for distillers grains as positive factors. “That has been helpful in terms of propping up price and putting some strength back in the market,” he said.

 

New hybrids among technologies credited for improved margins

Ethanol producers have been improving efficiencies through new technologies, such as corn oil extraction systems, new corn hybrids and new enzyme technologies. “Those factors in combination and some cases, individually, have been responsible for improved margins,” Sneller said.

 

These and other topics will be discussed at the Fuel Ethanol Workshop & Expo, June 10-13, in St. Louis, MO. For more information, visit www.fuelethanolworkshop.com.

 

 

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