Agricultural Economics Department
Date of this Version
7-10-2024
Document Type
Newsletter Issue
Citation
Cornhusker Economics (July 10, 2024)
Institute of Agriculture and Natural Resources, University of Nebraska-Lincoln
Abstract
Although we can expect more ethanol produced from corn in the coming years, it is unclear whether it will keep expanding at the same pace as in recent years or how much it will contribute to total ethanol production.
One point to keep an eye on is the typical dynamics of markets. If supply and demand conditions and price movements make corn-ethanol more profitable, ethanol plants in Brazil will keep increasing their production. If it makes more economic sense to produce corn-ethanol (as it happened recently), they will use more corn to produce ethanol.
Supply and demand conditions for ethanol, corn, sugar, and other related commodities in the coming years will determine the profitability of producing all these commodities, and producers will naturally focus their attention on the most profitable ones. But whatever the price signals from the market are, keep in mind that there is plenty of room for Brazilian plants to expand their production of ethanol. As we saw in the last few years, when opportunities arise, they are ready to take them.
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