Ethanol Industry Faces Headwinds
by Abby Schultz (CNBC) …“We have a lot of customers who are ethanol investors and plants have been very diligent paying down debt in 2011,” says Jason Ward, director of grain and energy for Northstar Commodity. “Kudos to them, but there is definitely some rough waters ahead for the ethanol sector.”
…Another proposal, more worrisome to the industry, would reduce the amount of ethanol required by the Renewable Fuel Standard when corn supplies are tight. The purpose of the proposed legislation is to ensure supplies are amply available for feed corn.
…The bill is not expected to pass at this late a date this year, in part because a Senate version hasn’t been introduced, but it remains a “headline risk” to the industry, and could mean the potential for the RFS to be modified in some way “within the next few years,” according to a report by Mark McMinimy, a research analyst at MFGlobal.
…Exports have provided a bright spot for the industry since last year as U.S. corn-based ethanol has become far less costly than Brazilian ethanol which is mostly made from sugarcane. READ MORE