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Estimated 2014 US ethanol industry profit: $7.8 billion

Estimated 2014 US ethanol industry profit: $7.8 billion


From WATTAgNet:

U.S. ethanol producers saw their best streak of profitability – 95 weeks without a loss for the model Iowa plant used to track and estimate industry profitability.

Using the average net profit for the representative plant, University of Illinois economist Scott Irwin estimated the entire U.S. ethanol industry pretax profit at $7.8 billion for 2014.

“2014 really was an amazing year for ethanol,” Irwin said in a report. “The record profits of 2014 are also part of the longest run of uninterrupted profits since we first began estimating margins in early 2007. The streak of positive profits began on March 15, 2013, and ended on January 2, 2015, or a total of 95 consecutive weeks without a loss.”

The average profit during the 22-month streak was 43 cents per gallon, more than 10 times the average 4 cents per gallon earned over the previous seven years.

The representative model plant assumes an average yield of 2.8 gallons of ethanol (including denaturant), includes fixed costs of 21 cents per gallon and debt service. The model is based on ethanol plant benchmarking studies by Christianson and Associates. Income in the model is based on weekly ethanol and DDGS prices reported at Iowa ethanol plants and reported crude corn oil prices. Input costs are also Iowa-based.


Ethanol industry pretax profit estimated at $7.8 B for 2014

ethanol industry came off its best streak of profitability in January, one that ran 95 consecutive weeks without a loss for the model Iowa plant used to estimate and track industry profitability. The representative 100 MMgy plant showed an estimated pretax net profit of more than $50 million in …

Read more at Ethanol Producer Magazine

Ethanol: Production Profits Were Amazing in 2014

The focus on the changing profit outlook for ethanol producers can obscure the fact that the industry is also coming off the best year it has ever had in terms of profitability. Some of the model assumptions include: To track plant profitability over time, weekly ethanol and DDGS prices at Iowa ethanol plants are collected starting in late January 2007.

Read more at Agfax

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