In its weekly "Today in Energy" brief, the Energy Information Administration (EIA) notes ethanol producers are benefiting from a large corn harvest and improved margins from dried distiller grains (DDGs). It states margins for ethanol production and DDGs have increased "because of the sharp drop in corn prices after the 2013 harvest, combined with increased exports for distillers grain."
From January 2012 through the last week of December 2013, the average price of corn delivered to Iowa ethanol plants was $6.61 per bushel ($236 per ton), states EIA. "Over the same period, the average revenue from sales of dried distillers grains was $2.00/bushel of corn used for ethanol production ($234/ton of distillers grains). Recently, margins for the production of ethanol and dried distillers grains have increased because of the sharp drop in corn prices after the 2013 harvest, combined with increased export demand for distillers grains."
In addition to its domestic use, exports of DDGs are also key. "During 2013, total DDGs exports reached 9.7 MMT, more than double the 4.5 MMT of total exports in 2008. China has played a key role in driving this growth, with total DDG exports to China rising from 1.4 MMT in 2011 (18% of total U.S. export volumes), to 2.2 MMT in 2012 (29% of total U.S. exports), and 4.5 MMT in 2013 (46% of total U.S. exports), according to USDA data," it states.