Off-the-Chart Profitability of Ethanol Production

Trends in the profitability of ethanol production were examined in afarmdoc daily邮政on March 14^Th。Using a model of a representative Iowa ethanol plant, it was estimated that a plant earned $23 million in profits during 2013. This was one of the best years ever for ethanol producers in terms of profitability. A new high in weekly profits of $2.55 per bushel of corn processed was reached in early December 2013. The high profits were driven by a drop in corn prices that substantially exceeded declines in ethanol and DDGS prices. It was also argued in the same post that there were logical reasons to suspect that the extended run of profits was unlikely to continue. Just the opposite occurred, as ethanol production profits subsequently exploded off-the-chart. Today's post will examine the spike in the profits of ethanol producers in recent months and the reasons behind it.

The analysis is based on the same model of a representative Iowa ethanol plant used in the March 14^Th邮政and other earlier posts on the profitability of ethanol production (see earlier postshere，，，，here，，，，andhere）。而不是重复读者针对植物模型的细节March 14^Th邮政有关模型的更多详细信息。图1给出了每蒲式耳加工的乙醇生产利润的更新（税前）估计值。历史悠久的利润飙升开始于2014年2月的第一周，在3月的最后一周，以前闻所未闻的每蒲式耳$ 4.50达到顶峰，然后在5月的第一周降至每蒲式耳1.45美元（请注意）：只需将蒲式耳的利润除以2.8即可转换为加仑）。新的峰值利润几乎比以前的纪录高2美元。最终结果是，在2014年的前四个月中，代表性工厂的利润为2340万美元，略高于2013年整个日历年中历史上高利润。

如图2所示，获得利润的原因很简单。更具体地说，在1月底至3月底之间，乙醇价格上涨了63％，而同一时期的玉米价格仅上涨了8％。讨论了乙醇价格飙升的根本原因，包括：i）相对较高的批发汽油价格支持乙醇价值，ii）乙醇的强大出口需求，iii）冬季进入冬季的低乙醇股票，iv）iv）铁路由于严重的冬季天气以及v）北达科他州巴肯地区原油生产越来越多的轨道油轮汽车的持续短缺。看来，单个因素并没有说明大部分价格上涨，而是因素的组合是一场完美的风暴。

那么，从这里哪里？如上所述，利润几乎已经下降了，回到年初的地位。尽管如此，按历史标准，每蒲式耳的利润仍然很高。经济逻辑仍然表明，这种情况不太可能持续下去。如3月14日所述^Th帖子有记录的乙醇与玉米价格之间的“协整”关系（请参阅Mallory，Irwin和Hays的论文for a formal analysis), which simply means that the relationship between ethanol and corn prices tends to revert to levels implied by an equilibrium long-run level of ethanol production profitability. If the ethanol price is too high relative to corn prices, then either the ethanol price must fall or the corn price must rise. We can provide a rough idea of the kind of adjustment that may be in the offing using the profits shown in Figure 1. Over 2007-2013, ethanol production profits averaged $0.20 per bushel. Assuming this is the "normal" level of profits in the industry, then we should expect profits to eventually fall from the current level of $1.45 to $0.20. If ethanol prices do all of the adjusting and other prices are held constant, the ethanol price would have to drop from the current level of $2.23 per gallon to $1.78 ($2.23 - $1.25/2.8) to restore equilibrium. If instead corn prices do all of the adjusting and other prices are held constant, the corn price would have to increase from the current level of $4.95 per bushel to $6.20 ($4.95 + $1.25) to restore equilibrium (not taking into account the impact on DDGS prices). For any particular episode it is difficult to know whether ethanol or corn prices will bear the brunt of the adjustment, but if corn prices now tend to drive ethanol prices due to the E10 blend wall, then one would expect ethanol prices to do the bulk of the adjusting.

最后，应提及有关上述利润分析的几个警告。首先，整个乙醇行业的产能和生产效率存在很大差异，在查看模型的利润估计时，应牢记这一点。其次，该分析假设输入购买和产出销售以本周的现货价格发生，这意味着未纳入远期营销策略的影响。第三，由于铁路车短缺，一些乙醇植物可能无法充分利用今年冬天和春季的高乙醇价格。

Implications

Ethanol production profits literally went off-the-chart in late winter and early spring. This was driven by a sharp increase in ethanol prices to new record levels due to a combination of factors. Economic logic suggests this situation is unsustainable, and either ethanol prices must adjust lower or corn prices higher to restore a long-run equilibrium in profitability. The most likely scenario is one where ethanol prices bear the brunt of the adjustment, eventually dropping as much as $0.40 per gallon from present elevated levels.

Issued by斯科特·欧文（Scott Irwin）
Department of Agricultural and Consumer Economics
伊利诺伊大学