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Drop in oil price squeezes ethanol producers | Ames Tribune

MINNEAPOLIS — The dramatic fall in oil prices has ended the party for another energy industry — ethanol.

Some producers of corn-based ethanol made record profits in 2014, but that’s over. Industry executives now are talking about breaking even or staying slightly profitable.

Cheaper gas affects ethanol producers because they sell into the same fuel market. Most gasoline is 10 percent ethanol.

“It’s good for the consumer, but it is getting hard on the industry,” said Brian Kletscher, CEO of farmer-owned Highwater Ethanol, one of five Minnesota-affiliated producers to report record 2014 profits.

Crude oil prices have dropped 50 percent since June, allowing happy drivers to pump $2-per-gallon gasoline into their tanks. It’s brought less cheer to ethanol producers. In January, wholesale ethanol fetched half what it did on some days in 2014.

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Drop in oil price squeezes ethanol producers.

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