Iowa ethanol profitability ‘best ever’

Source:  KRISTIN BUEHNER, Globe Gazette, Mason City, Iowa • Posted: Tuesday, June 17, 2014

The ethanol industry has created a renaissance for rural America, ethanol spokesman Walt Wendland told the Mason City Noon Rotary Club Monday.

“U.S. farm net income has increased by 158 percent since 2003,” Wendland said. “Ethanol’s been a factor in that.”

Distillers grain and corn oil are important byproducts of ethanol production. Corn oil is used as a component of biodiesel fuel and distillers grain as a component of animal feed.

CEO of Homeland Energy Solutions in Lawler and formerly president/CEO of Golden Grain Energy in Mason City, Wendland said the profitability of ethanol in Iowa this year “is the best it’s ever been.”

“A lot of that is due to the fact that exports are becoming very important,” he said.

Resistance to the ethanol industry by the crude oil industry is the main reason ethanol producers rely on exports, because the better the ethanol industry does the less the crude oil industry can grow, he said.

The largest importer of American ethanol is Canada, which imports 56.3 percent of U.S. ethanol that is exported, Wendland said. Second is the United Arab Emirates with 8.4 percent.

The Philippines, Europe, Brazil and Peru are other major importers.

One of the founders of Golden Grain Energy in Mason City, Wendland said, “The goal is to reduce dependence on crude oil and to find a market for our product.”

Ethanol production in the United States has increased from 2 billion gallons a year in 2004 to 12 to 14.8 billion gallons in 2013 due to the growth of ethanol plants in the nation, he said.

Ninety percent of ethanol production is in the Corn Belt — Iowa, Minnesota, Illinois, South Dakota, Nebraska, Kansas, Ohio, Indiana and Missouri, Wendland said.

Iowa, which produces 30 percent of the nation’s ethanol, is the largest producer followed by Minnesota and Illinois.

Wendland said the ethanol industry has done well even in the years when corn prices were high.

“We were still able to make it because of the high cost of gas.”

The thing that really hurt the industry was the severe drought in 2012, Wendland said.

In response to a question about ethanol plants that use corn stover, or waste materials such as corn stalks, Wendland said those plants present another opportunity for the ethanol industry to expand.

“It allows us to expand into more advanced ways of making ethanol that don’t have the food-versus-fuel argument,” he said.

Plants using corn stover are currently planned in Emmetsburg and Nevada, Iowa, he said.

All things considered, the report on the ethanol industry is positive, he said.

“People don’t realize we’ve done everything we promised,” Wendland said. “We’re lowering the cost of gasoline. We’re reducing the demand for crude oil. And we’re protecting the environment.”