What a difference a year can make.
Last year, the ethanol industry soared. This year, it has been rough.
Overproduction and the big drop in oil prices get the blame from industry insiders.
CEO of KAAPA Ethanol of Minden, Chuck Woodside, says strong profits last year spurred over-production.
“We’ve got over 15 billion gallons of production in a 14-billion gallon market,” Woodside tells Brownfield Ag News.
Woodside says something has to give.
“And whether that means that we see some reduction in runs, we’ve already started to see some within the last two months and we may see that continue, based on certain locations and certain technologies and capacities,” Woodside says.
There is an upside to this downturn, according to Woodside. The ethanol industry has grown stronger the past few years, reinvesting profits to provide a stronger foundation. That, says Woodside, will allow the industry to better weather the down market.
Ken Anderson, Brownfield Ag News, contributed to this story.