Where does the ethanol industry stand in 2014? That’s a big topic of discussion at this week’s Fueling Ethanol Workshop in downtown Indianapolis. Connie Chappell, Benchmarking Consultant for Christianson and Associates, says ethanol profitability is about more than just price right now.
“The big news story that I think is out there is that there is an increasing difference between the plants that aren’t doing quite as well and plants that are really successful. And there’s a big difference there.”
Chappell says last year’s conversation surrounding the ethanol industry was saving on production costs and staying afloat. That conversation has shifted.
“Now the conversation is much more focused on what do we do with our profits and where do we reinvest to make sure that we’re staying competitive going forward in the future.”
Recent data shows Chappell that plants with higher yields don’t necessarily have higher profitability.
“As distillers grains becomes more important to each plant’s profitability, right now it’s between 25 and 30 percent of a plant’s profitability is actually coming from, or their revenue is coming from distillers grains, corn oil, other coal products. So that piece of it starts to take on more significance over ethanol yield.”
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