EIA: ethanol industry margins benefit from distillers grains

By Susanne Retka Schill | March 06, 2014

The Energy Information Administration featured the ethanol industry and the importance of the coproduct, distillers grains, in its March 5, Today in Energy report. 

“Sales of dried distillers grains provide a significant portion of the total revenue received by ethanol facilities, underpinning the economic feasibility of ethanol fuel production,” the report said. The analysis looked at the period of January 2012 through December 2013, when the average price of corn delivered to Iowa ethanol plants was $6.61 per bushel, or $256 per ton. “Over the same period, the average revenue from sales of dried distillers grains was $2 per bushel of corn used for ethanol production ($234 per ton of distillers grains).” The report added that the sharp drop in corn prices after the 2013 harvest combined with increased export demand for distillers grains, has recently increased margins for the production of ethanol and dried distillers grains.  

The EIA report noted the growth in export demand. “During 2013, total DDGS exports reached 9.7 million metric tons, more than double the 4.5 million metric tons of total exports in 2008. China has played a key role in driving this growth, with total DDGS exports to China rising from 1.4 million metric tons in 2011 (18 percent of total U.S. export volumes), to 2.2 million metric tons in 2012 (29 percent of total U.S. exports), and 4.5 million metric tons in 2013 (46 percent of total U.S. exports), according to USDA data.”