Nebraska ethanol producers face thin margins
Nebraska Ethanol Board Administrator Todd Sneller says there’s a fine line between making money and losing money in the ethanol industry.
“Right now the profitability of ethanol is not particularly good, it’s been a prolonged period of almost break-even sort of margins, and a few cases where plants maybe were trying to deal with some debt as well,” says Sneller. “It’s just not been profitable to produce ethanol for some of those.”
Six of Nebraska’s 25 plants are idle.
Nebraska Corn Board member and farmer Curt Friesen says that makes it tough for farmers who have been selling their crops to those plants.
“We look at the price alone and they’ve probably added 20-25 cents to base here in the Midwest to our corn price,” says Friesen.
Friesen says costly corn can make ethanol production tight, but he says plants need to stay online for more than just farmers.
“Ethanol plants are trying to, I think, maintain their full production because the distillers grains are in big demand,” he says.
Cattle producers driven to feed alternatives like baled corn stalks because of the drought need by-products like distillers grains.
“Those bales have to be fed with distillers grains, otherwise those bales don’t have enough nutrients to feed the livestock,” says Friesen. “They are very dependent on getting distillers grains now, so if an ethanol plant shuts down it really makes that market pretty tight.”