Ethanol production holds steady

Source: Dan Piller • Des Moines Register  • Posted: Friday, January 27, 2012

Witih 41 plants, Iowa is the nation’s leading ethanol producing state

Three weeks after the expiration of the 45-cents per gallon blenders tax credit, ethanol production is running slightly ahead of last year’s pace.

The U.S. Energy Information Agency reported this week that ethanol production totaled 934,000 barrels per day for the week ending Jan. 20. That compared to production of 922,000 barrels per day for the same week last year.

The latest production had dipped slightly from the 944,000 barrels per day and 941,000 barrels per day in the first two weeks of 2012, which had been widely predicted after oil companies had blended furiously at the end of 2011 to capture the last of the tax credit.

Des Moines broker Tomm Pfitzenmaier noted that ethanol stocks have been building up and said “this begs the question of just how much ethanol plants will be willing to pay for corn and you have to wonder if we aren’t reaching the point where they are going to be reluctant to bid corn up.”

Ethanol prices actually have risen since the blenders’ credit expired on Dec. 31, from $2.14 per gallon on the Chicago Board of Trade to $2.21 per gallon on Wednesday. Ethanol had traded above $2.50 per gallon in November and early December as plants produced furiously to meet end of year demand.