By Andi Anderson
The ethanol industry experienced impressive growth from 2021 to 2023, with output in states like Nebraska reaching $5.7 to $6.9 billion, making ethanol one of the top three agricultural sectors. This period was also among the most profitable for ethanol producers nationwide. Scott Irwin, an agricultural economist, described it as “one of the best three-year periods” for ethanol profitability in the U.S.
Iowa, a major ethanol producer, also benefited during this time. However, recent data shows a downturn in profits. According to the Center for Agricultural and Rural Development (CARD) at Iowa State University, ethanol margins have declined in 2024. Operating costs for a typical Iowa plant mostly come from corn, which makes up around 80% of total costs. Profits occur when revenues exceed these costs plus capital expenses.
In 2024, net profits at Iowa ethanol plants ranged from a loss of $0.11 to a gain of $0.42 per gallon, averaging just $0.08 per gallon. This is lower than the historical average of $0.12 per gallon since 2007. The dip is mainly due to lower ethanol prices, though some co-product prices, like corn oil, have slightly increased.
The USDA reports that ethanol prices in Nebraska last week were $1.50 per gallon, slightly higher than last year. Corn oil prices also rose from $0.44 to $0.48 per pound. However, distillers grains saw a decline, dropping from $178.40 to $158.75 per ton.
Looking ahead, 2025 remains uncertain. Market fluctuations and upcoming federal decisions on trade and biofuel policies will play a major role in determining the industry’s direction. For now, Iowa ethanol producers are bracing for tighter margins and unpredictable trends in the months ahead.
Photo Credit: shutterstock-dickgage
Categories: Iowa, Energy