As we approach the new crop corn harvest, stored corn supply from last year gets tighter. And farmers may be holding on to it until they see the right price. This is the environment that ethanol producers are navigating through as they work to keep their plants stocked with corn.
Howard Boppart is the grain merchandiser with Marquis Energy out of Necedah. He tells Mid-West Farm Report that last year’s crop was good enough where corn supply won’t be an issue this year. It’s next year that has him concerned.
“There is definitely concerns with next year’s crop,” he says. “Locally, in this area… it does not look exceptionally well. The average guess is two-thirds to three-quarters of normal. We will have a crop, it’s just that it’s a lot smaller crop. Grain elevators or producers may not fill up their grain bins.”
Meanwhile, demand is strong for ethanol both domestically and overseas because it’s a renewable and affordable energy. Boppart says driving peaks in the summer and will go back down as it gets colder. Since the corn price is lower, ethanol producers’ margins are favorable. That will likely change next fall when ethanol demand slows, but corn prices stay high due to this year’s short crop.
Boppart explains that 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).
“That is an exciting thing that could happen down the road,” he says. “There’s a lot of real needs for development of that market. SAF is quite a bit expensive of course to produce than traditional jet fuel. There’s got to be a lot of innovation that has to happen yet to make that into fruition.”
In addition, the byproducts that come along with it, such as corn oil and dried distillers grains (DDGs), are also seeing strong demand.
“The corn oil market has been very strong over the last two or three years notably because of the increased use of biodiesel,” he says.
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