Ethanol Blog
Rick Kment DTN Analyst

Thursday 02/21/13

Ethanol Production Continues to Build

Ethanol production across the nation increased 1% at the end of last week from the prior week, following ethanol producers stepping back into the market. Some of the ethanol plants that idled their production during the last several months have started to come back online.

Even with corn futures prices near $7 per bushel, ethanol producers are now starting to focus on the potential for stronger ethanol markets based on seasonal demand. This helps encourage many to step back to the table as they expect margins to improve in the near future.

Total production at the end of last week was listed at 33.5 million gallons per day. This is an increase of 336,000 gallons per day from the week previous. The additional production increases are expected to be seen during the next month, although many producers will likely keep any production capacity gains on a tight reign.

Ethanol producers have the ability to significantly slow or speed up ethanol production capacity without opening or shutting plants, by regulating plant capacity levels. This is likely going to be one of the main tools used through the spring and summer by ethanol producers. With summer driving demand expected to continue to increase both gasoline and ethanol demand, it is not unlikely that additional production gains will be seen during the next couple of months.

Rick Kment can be reached at rick.kment@telventdtn.com

Posted at 4:25PM CST 02/21/13 by Rick Kment
Comments (1)
Re-staffing to turn on a plant has to be done when a long time window can assure the plant operator of a profit. Not only crush margins and other products revenue have to be positive, but costs also have to be stable. Corn supply ( thus cost) will not be in the bag until ? This is the real challenge. Existing running plants, with existing staff, will get to full capacity before more plants are brought online. 1% change is a trend, but some 10% left in capacity from where we are. More profits is needed to turn-on a cold plant and keep it running.
Posted by Eddy Lahens at 9:17AM CST 02/22/13
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