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Is The Ethanol Boom Over?
By Mr Ethanol | October 29, 2008
Hoosier Ag Today:
With oil prices falling and the recessionary economy cutting consumer demand, is the boom in the ethanol industry over? On the surface it does not look good for the ethanol industry. Oil prices are approaching $60 a barrel, the profit margins for ethanol producers are shrinking, and the credit crisis is making capitol harder to come by. 
Yet Bruce Rastetter with Hawkeye Renewables, one of the nation’s larger ethanol producers, remains optimistic, “I think the industry will recover because the fundamentals of the industry are so strong.” He said, while energy costs have abated in the short term, they will continue to be high long term and that the basic structure of the industry is sound.
He admits the credit squeeze has come at a bad time for the industry and more consolidations are likely. VeraSun has already closed its plant in Montgomery County, IN, and announced the company is for sale. Rastetter predicts this is only the beginning, “A year from now we will have fewer ethanol producers than we have today.” He said those who survive will have to have the skills and the access to capitol to compete.
Topics: Ethanol Prices |
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