Ethanol remains in the red

Source: By Dan Piller, Des Moines Register • Posted: Tuesday, June 12, 2012

Ethanol production remained in the red during May for the fifth consecutive month since the industry lost the 45-cents per gallon tax credit, according to figures from Iowa State University Extension.

The survey showed that each gallon of ethanol lost 7 cents during May. For the first five months of 2012, ethanol plants averaged operating losses of 9 cents per gallon.

This comes after a strong second half of 2011 when the ethanol industry recorded average opreating margins in the double digits.

Iowa is the nation’s largest ethanol producing state, with 41 plants that in 2011 produced about 3.7 billion of the 13 billion gallons of ethanol produced nationally.

Ethanol demand has been down also because of the drop in overall gasoline demand, down 6 percent from its peak in 2007 and the lowest since 2001, according to U.S. Department of Energy figures.