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CoBank report predicts ethanol downturn, but producer remains optimistic

A new report from CoBank says ethanol producers will soon face worsening profit margins as supply outpaces demand, which could potentially push the industry toward another round of consolidation.

CoBank predicts more ethanol production will be idled in the next 18 to 24 months, with some aging plants being retired.

But Duane Kristensen, general manager of Chief Ethanol, which operates two ethanol plants in Nebraska, remains optimistic. He says most ethanol producers have learned to manage the ups and downs in the market—and he says many plants are also working to diversify their operations.

“It is not just an ethanol plant anymore—it’s a biorefinery,” Kristensen says. “So we’re looking at different things—and one of those things the last number of years, certainly, was the corn oil separation.”

Kristensen says producers continue to perfect the separation process and are finding new industrial applications for their products.

“The kernel of corn has a lot of value into it that we’re not fully utilizing yet,” he says. “It’s an ongoing process. You’re seeing that every day, strides being made in different niche markets. It’s a trend that’s going to continue.”

Brownfield spoke with Kristensen at the American Coalition for Ethanol (ACE) conference in Omaha.  Kristensen is the vice president of that organization.

AUDIO: Duane Kristensen

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