CoBank: Ethanol production down in Q3, but profitability remains

By Erin Voegele | October 17, 2022

CoBank’s Knowledge Exchange released its latest quarterly report on Oct. 17. While U.S. ethanol production continued to trend down as the third quarter ended, CoBank stressed that profitability within the industry held.

The report cites recession fears, lower gasoline demand and capital market volatility as factors that limited ethanol production during the third quarter. According to CoBank, declining ethanol produciton in September was related to a 6 percent to 7 percent decline in gasoline demand, which the report attributes to macro fears.

Despite the drop in production, CoBank said margins finished the quarter near the upper end of long-term average levels of 25 cents to 30 cents per gallon amid relatively stable ethanol prices.

The quarterly report also addresses the recently signed Inflation Reduction Act, noting the legislation provides strong current and future support for biofuels. The IRA is expected to help expand the use of fuel ethanol towards 15 percent blend levels, increase production and use of renewable diesel, and support the development of sustainable aviation fuel (SAF) that uses alcohol as feedstock.

A full copy of the report is available on the CoBank website