A biofuels industry advisor says the ethanol industry is “ripe for consolidation.” Bruce Comer, director of California-based Ocean Park Advisors, says if tight ethanol margins continue, more companies will soon begin to evaluate their options.
“If margins stay where they are, more owners, more board members, and more managers are going to take a harder look at whether to continue to own and continue to fight the fight, or to look at other opportunities,” Comer said. “At a minimum, checking the market for what their assets might be worth.”
Nebraska is the nation’s number-two ethanol producer, behind only Iowa.
Nationwide, Comer notes that there are still 94 “stand-alone” ethanol plants that account for more than five-billion gallons, or 36-percent of domestic production.
“That steady march of consolidation of those 94 independent plants, I think we can expect to see that (continue) for the next several years,” Comer said. “And depending on how this year turns out with margins and inventory and exports and some of those other factors, it could push that number up and we could see a very active year.”
Comer says the pace of ethanol exports will be one of the key factors to watch over the remainder in 2016.
There are 24 ethanol plants in Nebraska that produce a total of more than two-billion gallons each year.
By Ken Anderson, Brownfield Ag Network