Economics of ethanol exports doubted

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Posted: Tuesday, December 10, 2013 12:00 am

The most recent EPA proposal to cut the ethanol mandate by about 20 percent works out to about 1.39 billions gallons of reduced demand, and a Nebraska official doesn’t see increased exports making up the difference.

The 1.39 billion gallons equates to the annual production of about 20 average ethanol plants, and that would mean “adverse economic consequences” in jobs and taxes lost, said Todd Sneller, administrator of the Nebraska Ethanol Board.

“In terms of exports, there may be a small export market, but the cost to access that international market from the Midwest is logistically difficult and costly,” Sneller said. “In addition, Brazil is already in that space so the economics are questionable on an ongoing basis.”

The Midlands are the center of the ethanol business. Iowa, with 42 plants, is the largest producer of both corn and ethanol. Nebraska is the second-largest producer of the fuel, with 24 plants, and the third-largest corn grower.

While some producers might be looking for new overseas customers, one Nebraska ethanol operator said it already has its hands full.

“We are having no problem finding demand for our product,” said Todd Becker, chief executive of Omaha-based Green Plains Energy, operator of about a dozen ethanol plants.

Overseas demand is robust, Becker said, with shipments going to Brazil, Africa, Europe and Asia.

“We are still hiring and still looking to expand,” Becker said.

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