Ethanol Producers Facing Tight Corn Supply

Tuesday, August 15th, 2023 -- 8:00 AM

(Wisconsin Ag Connection) Ethanol producers are facing a tight corn supply as they navigate rising demand for renewable fuel.

According to the Wisconsin Ag Connection, the supply of corn from last year's harvest is getting tighter, and farmers may be holding on to it until they see the right price. This is making it difficult for ethanol producers to keep their plants stocked with corn.

Demand for ethanol is strong both domestically and overseas. Ethanol is a renewable and affordable energy source, and it is becoming increasingly popular to reduce greenhouse gas emissions. Demand for ethanol peaks in the summer and goes back down as it gets colder.

Since the corn price is lower, ethanol producers' margins are favorable right now. However, that is likely to change next fall when ethanol demand slows, but corn prices stay high due to this year's short crop.

The U.S. makes enough ethanol to go around, and the industry is looking for more demand avenues such as exports or Sustainable Aviation Fuel (SAF). SAF is a type of jet fuel that is made from renewable sources, such as ethanol.

It is a promising new market for ethanol producers, but it is still in its early stages of development. In addition to ethanol, the byproducts of corn processing, such as corn oil and dried distiller’s grains (DDGs), are also seeing strong demand.

Corn oil is used in a variety of products, including biodiesel, cooking oil, and cosmetics. DDGs are a high-protein feed that is used for livestock and poultry. The ethanol industry is facing some challenges, but it is also poised for growth.

The demand for ethanol is strong, and the industry is looking for new ways to meet that demand. With continued innovation, the ethanol industry is well-positioned to thrive in the years to come.

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