There’s no doubt that 2013 was a banner year for ethanol producers, such as Archer Daniels Midland (ADM), Valero Energy (VLO) and Green Plains Renewable Energy (GPRE).
Last year, the profit margins in the $44-billion ethanol business were at the highest level
since the 2007 Renewable Fuel Standard was implemented. At times,
profits were as high as $1 per gallon of fuel produced, with an average
of $0.81 per gallon!
Ethanol producers owed the boom to increasing demand and a three-year
low in the price of corn. Demand was high for not only ethanol, but
also the dried distillers grains (DDG), a co-product of dry mill ethanol
production, which is used as animal feed.
But there are a few – three, to be exact – gray clouds on the horizon that might adversely impact the industry. (more)
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