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How many stations keep the price of E-85 high while sucking in gov subsidies?

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With $4.00 corn, current market for byproducts, and current wholesale ethanol prices there will be little, if any profits for plants. However- ethanol plants are figuring out real fast how to power their plants  with their own byproducts or nearby cattle manure. Many plants will also be producing corn oil for diesel fuel or lubes. Need is always the driver for innovation and the need this year will be to become more efficient to offset the increase in corn cost. While ethanol production is currently less profitable- I suspect gasoline will be back to last summer's levels and this will pull more ethanol demand.

 

Cessna- you make a valid point that some farmers will not benefit because landlords will raise rent as demand increases. When I was in Illinois (1978-1981) 80% of the Central IL land seemed to be held in family or bank trusts that the tenent farmer had to rent from. In southern IN. where I grew up and here in WI. there is less of that. Land ownership will be profitable for the forseeable future.

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With $4.00 corn, current market for byproducts, and current wholesale ethanol prices there will be little, if any profits for plants. However- ethanol plants are figuring out real fast how to power their plants  with their own byproducts or nearby cattle manure. Many plants will also be producing corn oil for diesel fuel or lubes. Need is always the driver for innovation and the need this year will be to become more efficient to offset the increase in corn cost. While ethanol production is currently less profitable- I suspect gasoline will be back to last summer's levels and this will pull more ethanol demand.

 

Cessna- you make a valid point that some farmers will not benefit because landlords will raise rent as demand increases. When I was in Illinois (1978-1981) 80% of the Central IL land seemed to be held in family or bank trusts that the tenent farmer had to rent from. In southern IN. where I grew up and here in WI. there is less of that. Land ownership will be profitable for the forseeable future.

 

Speaking of landownership.. sounds like a great investment right now..farmland

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If you bought awhile ago you can feel pretty good since prices are going up. Around here I used to think that people paid $2500 to $3000 an acre were crazy--now prices for good ground are between $5/6000 per acre. Some of that is investor money and some is because of 1031 transfers---where someone close to a city sold to developers for say 8/10 thousand and come out here to the boonies and think 5/6000 is a bargain.Like everything else in life, you can't group all farmers and landowners into the same situation. Like I said before, I'm in 2 different ethanol plants---one just posted a 200% return and the other about 30%, so all ethanol plants aren't equal either. :)

Marty

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