This industry operating at full speed barely made last years Gasoline blend levels of 7% ETOH, and stands little chance to make Bush’s higher levels in 2009 (likely to become higher given Obama’s alternate energy leanings….at least until they see mess / cost this losing alternate is in). And with the financial impacts on economy putting most farming industry in stress due credit line demands the lagged income requires – all stages of this industry are in trouble. The current 2009 corn futures are at record lows – and most larger growers cannot make money at these prices and so will not be planting without government subsidies for economic price (which will again put agricultural uses for corn back in stress – livestock feed/grocery items/grain exports/ect that were also causing starvation in some 3rd world countries in 2007/08. Several countries like China put a ban on future ETOH production plants because of domestic agriculture impacts.
So my guess is that the US will likely have to import ETOH (which goes against the alternate goal) and then subsidize foreign growers for growing price difference between its cost vs. gasoline and of course US consumers will continue to eat the loss in lower MPG resulting blend as well as tax cost for subsidy.
So…..perhaps this plant would be good buy for domestic if you overlook fundamentals of market & take into account the continued stupidity of political interfering in energy industry & market trends.
Regards
