Top Five U.S. Ethanol-Producing States Curb Production Amid Drought

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Researched by Industrial Info Resources (Sugar Land, Texas)--The top five ethanol-producing states are beginning to curb production amid drought conditions and high corn prices. Iowa, Nebraska, Illinois, Minnesota and Indiana are curbing production facilities as feedstock supplies tighten and margins shrink.

It is estimated that U.S. fuel ethanol production is already down by some 20% to 30% since the beginning of the year. Producers were able to pay down some of the debt incurred from building plants, and have been able to manage cash flow that has been made over the past couple of years; however, market forces forecast a bleak second half of 2012, and production could drop as much as 2 billion gallons by the end of the year.

The 41 ethanol plants in Iowa (the country's largest producer, at 3.5 billion gallons per year) are still producing, but have slowed production output. Nebraska's 24 plants (which rank second in production, at 1.9 billion gallans per year) are taking the same stand, and have not shuttered any plants.

Of the 14 plants in Illinois (which ranks third among states, at 1.2 billion gallons of capacity), two have suspended production: Aventine Renewable in Pekin, and Valero in Albion. The remaining facilities are facing a tough year. Minnesota's 21 ethanol plants lost Central Minnesota Ethanol in Little Falls in early July, but currently others are continuing to produce at a reduced rate. Minnesota ranks fourth in production, at 1.1 billion gallons per year.

Among Indiana's 13 plants, Valero idled its Linden plant back in June 2012; however, others are expected to try and weather the storm and stay in operation. Indiana ranks 5th overall at 1 billion gallons.

If margins continue to grow closer to unprofitable, additional plants across all ethanol-producing states will be shutting their doors.

Industrial Info's databases provide a comprehensive outline of all current development activities in the emerging alternative fuels market. Our North American Biodiesel Database covers 141 operational plants and 97 plants in development. Our North American Ethanol Database covers 216 operational plants and 118 plants in various development phases. Our North American Wood Fuel Pellet Database includes 68 operational plants that produce more than 25,000 tons annually, and 40 projects in progress.

Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, and eight offices outside of North America, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle™, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities.