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Ethanol settles in to market realities
August 31, 2007
Ethanol pricing and production seem to be reaching something of an equilibrium point as prices of gasoline, corn, and new plants seem to stabilize. The Chicago Tribune has a short but interesting piece on it today, saying that some would-be ethanol producers are having to back off plans as the margins get thinner and thinner.
They cite specifically the case of Little Sioux Corn Processors and their recent decision to delay construction of another plant as ethanol prices go down while corn and construction costs go up. They're not alone. Existing producers are feeling the pinch as they watch margins erode. This kind of market shifting is not surprising and happens naturally in such industries as a variety of market pressures ebb and flow.
It does make the point that efficiency in such plants is paramount. Producers that can't control costs will be washed out. (Such is the case in virtually every process industry.) You don't have to go through many issues of Control Engineering to find articles about ways to increase efficiency or cut costs through improved instrumentation and process control. In fact, if you go back to our August issue, you'll find one on the specific topic of control strategies for an ethanol producer. It's worth thinking about for any industry.
Posted by Peter Welander on August 31, 2007 | Comments (0)