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Next couple of months could be challenging for ethanol producers
It’s already been a challenging year for ethanol producers–and the near-term outlook isn’t much better.
“This has been a challenging year. We’ve seen significant movement in the corn market—and, overall, gasoline prices have gone all over the place,” says DTN ethanol analyst Rick Kment, “and there’s so many concerns, both in the ag markets and the other general financial markets—that has really significantly impacted the ethanol market.”
And then there’s the tightness in old crop corn supplies, which could lead to rationing of corn—and higher corn prices—this summer.
A recent analysis from the University of Illinois estimated that, on average, ethanol plants will not be able to pay more than $6.75 per bushel for corn this summer without running in the red and risk having to idle their facilities.
Kment doesn’t look for an industry-wide shutdown—but he says many plants may have to throttle down on production.
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