Agricultural Economics Department

 

Date of this Version

October 2007

Comments

Published in Cornhusker Economics, 10/17/2007. Produced by the Cooperative Extension, Institute of Agriculture and Natural Resources, Department of Agricultural Economics, University of Nebraska–Lincoln.
http://www.agecon.unl.edu/Cornhuskereconomics.html

Abstract

Ethanol prices are low in the Midwest, prompting suggestions that the boom is over. It is perhaps slowing down for the next couple of years, but is likely to resume after that. Today’s gross processing margin (ethanol price minus net corn feedstock cost) is in the range of $.80/gal – high by historical standards – but low relative to 2006 (see Figure 1 on next page). Also, the low ethanol price appears to be partly due to transportation and distribution bottlenecks, and those are not permanent.