Nebraska Ethanol Board administrator Todd Sneller says it’s a good news-bad news scenario.
“We’ve seen a decline in the margins at ethanol plants but December was an unusual month given the lower gasoline prices,” Sneller says. “It was unusual in that there was a significant increase in demand worldwide for ethanol, with a lot of product going to Brazil and to Europe and some to China.”
Sneller says while gas prices are falling, demand for an ethanol by-product is on the rise.
“The decision by the Chinese government to again open the doors for distiller’s feed imports into China has created a huge demand for distiller’s feeds coming out of the ethanol plants,” Sneller says, “Of course, the only way to get distiller’s feeds is to make ethanol.”
Nebraska is the nation’s #2 producer of corn-based ethanol, behind only Iowa.
Sneller says many ethanol plants experienced good economic conditions in early 2014. Because of that, he says some plant operators have managed to deal with the recent low gasoline and oil prices.
Crude oil prices have fallen to $50 a barrel in many markets, half what it cost a year ago. AAA-Nebraska reports the statewide average price for gasoline is $2.01 per gallon.
By Jerry Oster, WNAX, Yankton