FarmPolicy

November 13, 2018

Biofuels; Trade; and, Policy Issues

Categories: Ethanol /Nutrition /Trade

Biofuels

Jacob Bunge and Jesse Newman reported in Saturday’s Wall Street Journal that, “Tumbling oil prices are bringing unwelcome tidings to one of the U.S. Farm Belt’s hottest industries.

Ethanol makers are bracing for a drop in earnings as cheap crude pushes down the prices they fetch from refiners to blend the corn-based fuel additive into gasoline. Ethanol producers also face a recent jump in the price of corn, their main raw material.

“Falling profit margins for the $40 billion U.S. ethanol industry may cause some companies to scale back production in 2015, analysts and industry executives say. Still, many observers think ethanol demand may remain steady or even rise if cheap gasoline spurs U.S. motorists to drive more, tempering the hit to ethanol earnings.”

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