According to a March 6 report from the U.S. Energy Information Administration (EIA), estimated ethanol production margins at U.S. corn ethanol plants averaged 22 cents per gallon in 2017.
While steel tariffs are currently grabbing most ag headlines these days, possible changes to the Renewable Fuel Standard (RFS) may produce longer term challenges for U.S. agriculture. Battle lines between oil refiners and ethanol producers and their suppliers (corn growers) have been clearly drawn.
U.S. ethanol production in mid-June set a record and is poised for new all-time highs, as strong demand and the prospect of a “mini harvest” of corn is supporting margins, according to a report in agrimoney.com.
Farm equipment manufacturers and dealers who reaped the benefits of the explosive growth of corn ethanol in the past decade with skyrocketing equipment sales, probably shouldn’t count on anything near that level of growth in the decade ahead.
While the future of ethanol is facing an uncertain future as the political battles about its usefulness continue, last year most U.S. ethanol producers were swimming in profits like they have never experienced.
With the backing of DuPont, BP and billionaire Richard Branson, it looks like production of butanol could have legs when it comes to challenging ethanol as a fuel additive and claim some portion of the $26 billion renewable fuels market, according to a January 29 report by Bloomberg.
More North American farm equipment dealers see the production of ethanol from corn as a bigger benefit for the agricultural industry than it is to the economy as a whole.
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In this episode of On the Record, brought to you by Associated Equipment Distributors, we take an initial look at the Dealer Business Outlook & Trends Report and what dealers are forecasting for 2025.