is part of the Division of Informa PLC

This site is operated by a business or businesses owned by Informa PLC and all copyright resides with them. Informa PLC's registered office is 5 Howick Place, London SW1P 1WG. Registered in England and Wales. Number 8860726.

  • American Agriculturist
  • Beef Producer
  • Corn and Soybean Digest
  • Dakota Farmer
  • Delta Farm Press
  • Farm Futures
  • Farm Industry news
  • Indiana Prairie Farmer
  • Kansas Farmer
  • Michigan Farmer
  • Missouri Ruralist
  • Nebraska Farmer
  • Ohio Farmer
  • Prairie Farmer
  • Southeast Farm Press
  • Southwest Farm Press
  • The Farmer
  • Wallaces Farmer
  • Western Farm Press
  • Western Farmer Stockman
  • Wisconsin Agriculturist

Ethanol Producers' Earnings Come Up Short

High corn prices have hurt some producers.

As ethanol production's demand for corn has driven corn prices upward, those same ethanol producers have begun to feel the effects of the climb in prices. 

Archer Daniels Midland, the largest U.S. ethanol producer, cited high corn prices when it reported quarterly earnings that fell short of expectations. VeraSun Energy Corp. paid more than $4 a bushel for corn - more than twice what it paid the previous year - and saw a loss in the first quarter of 2007. And Aventine Renewable Energy Holdings spent an average of $3.58 per bushel in the same quarter, 69% more than a year before.

However, analysts say most ethanol plants would not face losses unless corn prices were much higher. For that to happen, Ag Resource Co. president Dan Basse tells the Associated Press that, based on current costs and an ethanol price of $2.20 a gallon, corn would have to reach $4.80 a bushel.

Meanwhile, an April 27 Lehman Brothers report has ethanol demand lagging behind supply in the second half of 2007, with a projected supply of 445,000 barrels a day but a demand of 420,000 barrels. The report partly blames the lack of infrastructure for transporting ethanol to the pump in the U.S.

Hide comments

Comments

  • Allowed HTML tags: <em> <strong> <blockquote> <br> <p>

Plain text

  • No HTML tags allowed.
  • Web page addresses and e-mail addresses turn into links automatically.
  • Lines and paragraphs break automatically.
Publish