Ethanol Producers Respond to Market Conditions
(U.S. Energy Information Administration/Ethanol Producer Magazine) Beginning in summer 2012, the prices of ethanol and corn reached levels where production costs at relatively simple ethanol plants exceeded revenue. These simple plants, which are not able to recover corn oil, make up a diminishing portion of the ethanol industry. Reacting to the market conditions, several ethanol plants temporarily shut down. By January 2013, the number of idled ethanol plants had grown to at least 20.
Relatively simple ethanol plants produce ethanol and distillers grains from corn. More advanced plants are able to recover other products, like corn oil, from a portion of the distillers grains. Ethanol plants with corn oil recovery units are able to earn more revenue, so they usually have higher profit margins than plants without corn oil recovery, even if their production costs are slightly higher.
…During plant shutdowns, some companies have embarked on new capital projects to recover corn oil, while others are performing routine maintenance and looking for opportunities to buy corn economically. Two plants, POET Biorefining in Macon, Missouri, and Abengoa in Madison, Ill., may add corn oil recovery units in 2013. Others, such as an ADM facility in Walhalla, N.D., could shut down permanently. READ MORE and MORE (New York Times)