State of the Industry: Ethanol regaining feet

www.farmweeknow.com
Martin Ross
2010-02-22

A year or so ago, “the very foundation of this industry and the economy were shaking,” national Renewable Fuels Association (RFA) President Bob Dineen recalls.

But the ethanol industry has weathered “the worst economic climate since the Depression,” and emerged “stronger and a bit leaner,” Dineen reported during the National Ethanol Conference in Orlando.

In fact, the industry continued to expand in 2009, opening 1.5 billion gallons of new capacity and, according to Dineen, “preparing to fully meet the demands of the (federal) renewable fuels standard (RFS).” According to U.S. Department of Energy projections, production likely will rise from 2009’s average 700,000 barrels per day in 2009 to an average 800,000 daily barrels in 2010 and 850,000 barrels in 2011."

Dineen credited growers with delivering a 13.2 billion-bushel corn crop, “despite a wet spring that delayed planting, a cool, dry summer that slowed growth, and a wet fall that made harvest one of the latest ever.”

Evidence of recovery can be seen across Illinois. The former Williams Energy ethanol plant in Pekin has repowered as Illinois Corn Processing LLC, a partnership between MGP Ingredients and SEACOR Energy. Industry giant Abengoa is moving ahead with a Southern Illinois corn ethanol plant. And Gene Griffith, whose Patriot Renewable Fuels launched Annawan operations on the brink of the Great Recession, has come out the other end with no regrets.

“We started production Sept. 1, 2008,” Patriot’s CEO told FarmWeek at the Orlando meeting. “That was at a time when there was a lot of corn volatility. We fortunately got in kind of at the tail end of that, as corn prices were dropping. From a business standpoint, that was very helpful.

“Of course, there’s been a lot of volatility in both the corn and ethanol prices, but that kind of stabilized toward the end of 2009. The first half was still somewhat weak, but the last half of 2009 was very good. I think most of the plants that are producing are finding its very acceptable today. There are some margins to be had.”


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