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Ethanol Industry in Precarious State

Two large producers have announced plans to sell part of their businesses as industry struggles

The exit of Bunge and the possible diminishing role of ADM along with other cutbacks and plant shutdowns like the one announced by POET last year, underline the precarious financial state of the U.S. ethanol industry, reports Successful Farming.

Taken together, they strike another negative note for corn growers, who rely on ethanol plants’ corn consumption as a corn market mover.

Chronic overproduction by the industry’s 210 plants in 27 states has occurred for six straight years.

Coupled with an estimated 4-billion-gallon drop in demand because of the Small Refinery Exemptions (SREs) granted by the U.S. Environmental Protection Agency and another drop in demand because of declining gasoline consumption by U.S. motorists, it is easy to see why ethanol industry profits have been shrinking for several years.

Read the full report at Successful Farming.

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