Narrow Ethanol Margins Could Get Worse

Narrow Ethanol Margins Could Get Worse

Ethanol margins, as calculated by the Center for Agricultural and Rural Development at Iowa State University, have fallen back to marginal levels last seen in early 2013. In addition, analysis by University of Illinois economists suggest that there is a real risk that DDGS prices may drop in the next few months, taking ethanol producers’ returns into the red. However, they note that demand for ethanol should be strong enough that if that happens, the price of ethanol will rise enough to keep plants producing the fuel.    

To read the study, including the relationship between DDGS and corn and  soybean meal prices, as well as seasonality of demand for DDGS, go to farmdoc.  

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