Tighter Ethanol Margins Causing Concern for Industry

(WASHINGTON, DC) Despite growing demand for gasoline, the ethanol industry experienced an increase in ethanol stocks. The end result is tighter margins and in some cases losses for producers. With current prices trading at a 13-year low, ethanol plants are facing tough decisions. For the 55 million gallon per year Otter Tail ethanol plant in Fergus Falls, Minnesota, the decision is to idle the plant. Still, ethanol production remained unchanged from the prior week at more than one million barrels per day or just under 50 million gallons daily. According to the Energy Information Administration (EIA), average weekly gasoline demand expanded 2.3% to a seven-week high or 388 million gallons per day. As a percentage of daily gasoline demand, daily ethanol production decreased last week to 11.32%.