The average 100-million-gallon-a-year ethanol plant in Iowa had a record profit of 54 cents a gallon in 2014, says economist Scott Irwin of U-Illinois at farmdoc daily. Plants prospered in the face of falling ethanol prices because of an steep drop in the price of corn, the feedstock for making the biofuel and coproducts such as distillers dried grains and corn gluten feed. “The 2014 net profit of $54.4 million is more than twice the profits of the next highest year [2007, $25 million],” says Irwin.
“The large profits of 2014 (and 2013) will provide a much needed financial cushion as the industry faces a substantially changed profit outlook in 2015,” due to the drop in petroleum prices, said Irwin. “The key question moving forward is whether 2013-2014 profits were a temporary blip due to a unique set of circumstances or reflected a new normal driven by a robust ethanol export market.”