In Washington, the Energy Information Administration Estimated says operating margins for corn-based fuel ethanol plants in the Midwest decreased to multiyear lows in 2019, averaging about 3.5 cents per gallon (gal) through the first half of the year. Ethanol margins were at or near zero during June and July because of rising corn prices and high ethanol inventory levels. Lower operating margins mean some ethanol plants may cut or even pause production until conditions improve.
The U.S. Energy Information Administration (EIA) estimates operating margins for a dry mill corn ethanol plant of average capacity in the Midwest by taking the sum of the revenue generated from the sale of ethanol and co-products—such as distillers’ dried grains with solubles (DDGS) and distillers’ corn oil—and subtracting variable and fixed costs associated with producing ethanol. Variable costs include expenses, such as the cost of corn as ethanol feedstock and the natural gas used to produce thermal energy, along with an assumed fixed operating cost of 35 cents/gal.
Category: Producer News