Happy Days are Here, Again, for the Ethanol Industry

Nov 29, 2021

Domestic ethanol demand is expected to remain high.

Happy days are here again at ethanol plants, with profits nearing the all-time high-water mark set in 2014.

The black ink has all but erased the bad old days of 2020 brought on by the pandemic-induced cutback in liquid fuel use that befell the industry.

Scott Irwin, Laurence J. Norton Chair of Agricultural Marketing at the University of Illinois at Urbana-Champaign, said the rapid rise in ethanol plant profits has brought smiles to ethanol plant operators and owners across the United States. “Happy days are here again is an accurate statement right now,” Irwin told Successful Farming in a telephone interview.

Irwin said he doubts that 2021’s profit margins will top the record returns from seven years ago but, because of the incredible ethanol price spike that occurred in the last four months of the year, they will be close. On March 28, 2014, a representative Iowa ethanol plant modeled by Irwin chalked up a record profit margin of $1.53 profit-per-gallon. In mid-November 2021, profits at the representative Iowa plant totaled $1.34 a gallon.

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Video: Dicamba Returns for Georgia Farmers: What the New EPA Ruling Means for Cotton Growers

After being unavailable in 2024 due to registration issues, dicamba products are returning for Georgia farmers this growing season — but under strict new conditions.

In this report from Tifton, Extension Weed Specialist Stanley Culpepper explains the updated EPA ruling, including new application limits, mandatory training requirements, and the need for a restricted use pesticide license. Among the key changes: a cap of two ½-pound applications per year and the required use of an approved volatility reduction agent with every application.

For Georgia cotton producers, the ruling is significant. According to Taylor Sills with the Georgia Cotton Commission, the vast majority of cotton planted in the state carries the dicamba-tolerant trait — meaning farmers had been paying for technology they couldn’t use.

While environmental groups have expressed concerns over spray drift, Georgia growers have reduced off-target pesticide movement by more than 91% over the past decade. Still, this two-year registration period will come with increased scrutiny, making stewardship and compliance more important than ever.