Ethanol Margins Improve, But Still Too Much Capacity

The COVID-19 outbreak exacerbated headwinds the ethanol industry was already grappling with, which included reduced gasoline consumption and softening exports. A recent report from CoBank indicates the ethanol industry currently has excess capacity of 1 billion gallons and this is expected to increase to 2.4 billion gallons in 2021.

Operating margins for producers had slipped to an average of 15 cents per gallon vs. the historical average of 28 cents per gallon. But in a…

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