High corn prices thinning ethanol margins

Source: By Mark Dorenkamp, Brownfield • Posted: Wednesday, May 19, 2021

High corn prices are thinning ethanol margins. Renewable Fuels Association CEO Geoff Cooper tells Brownfield biofuel producers are concerned about market dynamics. “Especially when you think about getting into July and August, and how far is this old crop going to stretch before we get new crop coming in. But I’ll tell you, so far the industry has been able to manage these higher corn prices pretty effectively.” He says many plants remain profitable because oil prices have also been rising, and demand for ethanol co-products like dried distillers grains is strong. “The input costs on the front-end of the process are higher, but we’re also receiving higher prices for all of the outputs on the backend. And so far, that’s allowed producers to manage this much higher price environment that we’re seeing.”