Ethanol Industry Shares Optimism

The price of commodities is top of mind for ethanol plants because it determines what growers will put into the ground this spring. Roland Koenig is the commodities manager at Marquis Energy. He says the favorable cash corn prices (more than $6 per bushel) makes it easy for ethanol plants to purchase corn from farmers.

He tells the Mid-West Farm Report the biggest question he’s getting from farmers is “how high will the price of corn go?” They’re waiting for it to get to $7 or $8 dollars a bushel, Koenig says. He adds another key issue is the higher price of nutrients or fertilizer, which have doubled from last year. He says luckily the current price of corn balances that out. Now it’s all about looking at futures and hoping a bumper crop keeps the farm profitable.

He says there was talk of growers planting more soybeans this spring because of favorable November bean prices, but he predicts farmers will rotate crops as normal and there will be enough corn this fall.

Supply chain disruption is impacting ethanol plants, but for the most part, Koenig says Marquis Ethanol has been okay. Demand for ethanol byproducts, such as Dried Distillers Grains and corn oil, also looks good.

Koenig says some of the policies that the ethanol industry is looking at includes how ethanol fits in with carbon sequestration opportunities. He also says the industry wants to work alongside electric vehicles as the clean transportation market gains more traction. He says this because ethanol is already a clean, renewable and domestic fuel source.