A new ethanol plant owned by Louis Dreyfus Commodities began production of the corn-based fuel this past week. The Iowa Renewable Fuels Association made the announcement May 5, saying that the new plant will produce 100 million gallons of ethanol and 300,000 tons of distillers grains annually.

"Thanks to the fortitude of companies like Louis Dreyfus Commodities, Iowa's ethanol industry continues to move forward," says IRFA Executive Director Monte Shaw. "I can't predict the future, but there is a sense that a corner has been turned away from the difficult ending of 2008 in terms of poor profitability for the ethanol industry. This new biorefinery creates green collar jobs and provides an attractive market for corn for local farmers. That is what the ethanol industry has been about since day one and that won't change."

Jay Nelson of Louis Dreyfus Commodities stated: "We appreciate all the support we have received from our state, county and local partners in Iowa. Local partnerships have always been of paramount importance to Louis Dreyfus over the course of our 150-plus year history. We look forward to being an active part of the community for many years to come."

Ethanol shows signs that returns are improving

Iowa ethanol and biodiesel manufacturing plants have suffered from low ethanol prices and tight profit margins for much of the past year or so. In some cases margins have been negative. Some plants have shut down or cut back their production. Several have declared bankruptcy.

Shaw adds, "Iowa had a new ethanol plant come online a couple weeks ago and another Iowa plant came on line this past week—the Grand Junction plant. That's probably pretty much going to be it for the near-term future in Iowa, in regard to new ethanol plants opening up. We're going to have time now for the market to sort itself out."

He does see some signs of a turnaround and financial improvement. "Our ethanol and biodiesel producers here in Iowa say April seemed to be a little better month for them financially, compared to the previous several months. Hopefully that's a sign for the future," says Shaw.

Iowa still leads in ethanol, biodiesel production

Ethanol and biodiesel plants haven't been immune from the general economic recession. "They've been hurt by that and by the low price for ethanol, and we've have seen a dramatic slowdown in new plant construction," says Shaw.

Iowa is the leader in renewable fuels production. Iowa has 40 ethanol refineries capable of producing nearly 3.3 billion gallons annually. Three more ethanol refineries under construction will add nearly 500 million gallons of capacity.

The Iowa Renewable Fuels Association was formed in 2002 to represent the state's ethanol and biodiesel producers. The trade group fosters the development and growth of the renewable fuels industry in Iowa through education, promotion, legislation and infrastructure development.