Beruflich Dokumente
Kultur Dokumente
Overview and Assumptions – Overview of the model, assumptions and data sources.
Economic Ethanol Facility Model – The economic model that computes the monthly costs, revenue and pro
Tables:
Costs and Returns – Monthly Results per Gallon of Ethanol
Costs and Returns – Monthly Results per Bushel of Corn
Charts:
Ethanol Input and Output Prices – Monthly corn, natural gas, ethanol and DDGS prices – 2005 to pre
Ethanol Revenue – Monthly ethanol and DDGS revenue – 2005 to present
Breakeven Purchase Cost for Corn and Sale Price for Ethanol – Monthly prices ethanol facility can p
ethanol just cover costs – 2005 to present.
Corn at Market Price -- the analysis is based on corn at its market price
Ethanol Costs – Monthly cost to produce ethanol per gallon (total and divided by category) – 2005 to
Ethanol Revenue, Costs and Profits – Monthly costs and returns per gallon – 2005 to present.
Grind Margin and Return Over Variable and Total Cost – Monthly return over grind margin, variable, t
Return on Equity – Monthly percent return on equity – 2005 to present.
Allocation of Ethanol Profits (losses) – Monthly distribution between the ethanol producer and the cor
Corn at Cost of Production -- the analysis is based on corn at its cost of production
Ethanol Costs – Monthly cost to produce ethanol per gallon with corn costs projected into the future –
Ethanol Revenue, Costs and Profit – Monthly costs and returns per gallon – 2005 to present.
Allocation of Ethanol Profits (losses) – Monthly distribution between the ethanol producer and the cor
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Overview and Assumptions of Ethanol Profitability
The profitability of ethanol production is extremely variable. Due to the volatile price nature of ethanol and corn, its major feedstock, ethanol
profitability can change rapidly from month to month. In addition, price variations of its co-product (distillers grains with solubles, DDGS) and its
energy source (natural gas) add to the variability of ethanol profits.
To track the profitability of corn ethanol production, an economic model of a typical Iowa corn ethanol plant was created. This is a 100 million
gallon facility with construction costs similar to plants built in 2007. The costs and efficiencies are believed to be typical of Iowa ethanol plants.
The prices of ethanol, DDGS, corn and natural gas are updated monthly to compute the current profitability of ethanol production.
1) Ethanol Price 1 – Ethanol daily price F.O.B. (Free on Board) the plant (converted into monthly average prices) at selected ethanol plants in Iowa as reported by USDA Ag Market News
2) Corn Price (No. 2 yellow) 1 – Spot bid daily corn price (converted into monthly average prices) at selected ethanol plants in Iowa as reported by USDA Ag Market News in the National
3) DDGS Price 1 – Distillers Grains with Solubles daily price F.O.B. the plant (converted into monthly average prices) at selected ethanol plants in Iowa as reported by USDA Ag Market N
4) Natural Gas Price – Monthly Iowa natural gas price for industrial users as reported by the Energy Information Administration (official energy statistics of the U.S. government).
Although these prices are representative of Iowa ethanol plants, they may not be representative of plants in other regions or states. In the
economic model the user can increase or decrease any of the price series by a fixed amount to represent a special situation. An adjustment in
a price series will be reflected in the analysis tables and graphs.
To show how this facility would have performed in the past, the monthly profitability time-series is started in January, 2005. Although this facility
would not have been in production at this time (built in 2007), it provides a perspective on how this facility would have performed historically.
Revenue, costs and net returns (profitability) are shown monthly per gallon of ethanol and per bushel of corn. Also, ethanol and corn price
breakeven levels are computed.
Input coefficient adjustment. Although we believe the coefficients in this model are a good representation of a corn ethanol plant, the user has
the ability to change any of the input coefficients in the model to fit a special situation. A change in an input coefficient will be reflected in the
analysis tables and graphs.
The monthly profitability of this hypothetical plant is computed by using the monthly market prices for ethanol, corn, DDGS and natural gas.
Each month the analysis is updated with the previous month’s prices. All other variables are held constant throughout the analysis.
1
The USDA Ethanol report for Iowa began in October of 2006. Price data prior to Oct 2006 was created for ethanol, corn, and dried distillers grains. The
Omaha rack ethanol price, the USDA Interior Iowa Grain (corn) prices, and the Lawrenceburg, Indiana distillers grains price from the USDA Feed Grains
Database were used to create this series. The pre-Oct. 2006 series was created by comparing the post-Oct. 2006 Iowa Ethanol price series to these databases
prices and adjusting the pre-Oct. 2006 Iowa Ethanol series by these differences.
Corn at Market Price -- the analysis is based on corn at its market price
Ethanol Costs – Monthly cost to produce ethanol per gallon (total and divided by category) – 2005 to present.
Ethanol Revenue, Costs and Profits – Monthly costs and returns per gallon – 2005 to present.
Grind Margin and Return Over Variable and Total Cost – Monthly return over grind margin, variable, total costs – 2005 to present.
Return on Equity – Monthly percent return on equity – 2005 to present.
Allocation of Ethanol Profits (losses) – Monthly distribution between the ethanol producer and the corn farmer – 2005 to present.
Corn at Cost of Production -- the analysis is based on corn at its cost of production
Ethanol Costs – Monthly cost to produce ethanol per gallon with corn costs projected into the future – 2005 to present.
Ethanol Revenue, Costs and Profit – Monthly costs and returns per gallon – 2005 to present.
Allocation of Ethanol Profits (losses) – Monthly distribution between the ethanol producer and the corn farmer – 2005 to present.
Total Revenue of Ethanol Production
$4.00
$3.50
$ per gallon
$3.00
$2.50
$2.00
$1.50
$1.00
$0.50
$-
-13 -13 -13 -14 -14 -14 -15 -15 -15 -16 -16 -16 -17 -17 -17 -18 -18 -18 -19
n y p n y p n y p n y p n y p n y p n
Ja Ma Se Ja Ma Se Ja Ma Se Ja Ma Se Ja Ma Se Ja Ma Se Ja
Source: USDA AMS Iowa Ethanol Report
$3.00
$2.50
$2.00
$1.50
$1.00
$0.50
$-
-13 -13 -13 -14 -14 -14 -15 -15 -15 -16 -16 -16 -17 -17 -17 -18 -18 -18 -19
n y p n y p n y p n y p n y p n y p n
Ja Ma Se Ja Ma Se Ja Ma Se Ja Ma Se Ja Ma Se Ja Ma Se Ja
Fixed
Source: USDA AMS Iowa Ethanol Costs
Report, EIA Other Variable Natural Gas Corn
Ethanol Production Revenue,
Costs, and Profit
$4.00 (corn cost at corn market price)
$3.50
$ per gallon
$3.00
$2.50
$2.00
$1.50
$1.00
Ethanol Production Revenue,
Costs, and Profit
$4.00 (corn cost at corn market price)
$3.50
$ per gallon
$3.00
$2.50
$2.00
$1.50
$1.00
$0.50
$-
-13 -13 -13 -14 -14 -14 -15 -15 -15 -16 -16 -16 -17 -17 -17 -18 -18 -18 -19
n
$(0.50) y p n y p n y p n y p n y p n y p n
Ja Ma Se Ja Ma Se Ja Ma Se Ja Ma Se Ja Ma Se Ja Ma Se Ja
Source: USDA AMS Iowa Ethanol Report, EIA
$1.40
$ per gallon
$1.20
$1.00
$0.80
$0.60
$0.40
$0.20
$-
-13 -13 -13 -14 -14 -14 -15 -15 -15 -16 -16 -16 -17 -17 -17 -18 -18 -18 -19
$(0.20)
n y p n y p n y p n y p n y p n y p n
Ja Ma Se Ja Ma Se Ja Ma Se Ja Ma Se Ja Ma Se Ja Ma Se Ja
$(0.40)
Return
Source: USDA AMS Iowa Ethanol Report, EIA Over Total Cost Return Over Variable Cost
E t h a n o l $ P e r G a llo n
D D G S P r ic e P e r T o n
Monthly Output Prices
(Iowa Ethanol and DDGS Prices)
$3.00 $300
$2.50 $250
$2.00 $200
$1.50 $150
$1.00 $100
$0.50 $50
C o rn $ P e r B u s h e l
$- $-
P e r C u b ic F o o t
Source: USDA AMS Iowa Ethanol Report Ethanol price per gallon DDGS price per ton
$6.00 $8.00
$6.00
$4.00
$4.00
$2.00 $2.00
$- $-
Source: USDA AMS Iowa Ethanol Report, EIA Cor n pr ice per bushel N at ural Gas price per Cubic Foot
$ per bushel
160%
140%
120%
100%
80%
60%
40%
20%
0%
-20%
-40%
Source: USDA AMS Iowa Ethanol Report
Cost to Produce Ethanol
(corn at cost of production)
$3.00
$ per gallon
$2.50
$2.00
$1.50
$1.00
$0.50
$-
0 1 1 2 3 4 4 5 6 7 7 8
-05 -05 l-06 -07 -08 -08 l-09 r-1 -1 t-1 l-1 r-1 -1 t-1 l-1 r-1 -1 t-1 l-1
an ct u
J pr an ct Ju Ap an c Ju Ap an c Ju Ap an c Ju
J O A J O J O J O J O
Ethanol Fixed Costs Ethanol Variable Costs
Natural Gas Corn Input Costs Less Govt Payments
Source: USDA AMS Iowa Ethanol Report, ISU Ethanol Profitability, ISU Estimated Costs of Crop Production, EIA
Cropland Rent
Natural Gas Corn Input Costs Less Govt Payments
Source: USDA AMS Iowa Ethanol Report, ISU Ethanol Profitability, ISU Estimated Costs of Crop Production, EIA
Cropland Rent
Ethanol Production Revenue,
Costs, and Profit
(corn at cost of production)
$4.00
$ per gallon
$3.50
$3.00
$2.50
$2.00
$1.50
$1.00
$0.50
$-
$(0.50) -13 -13 -13 -14 -14 -14 -15 -15 -15 -16 -16 -16 -17 -17 -17 -18 -18 -18 -19
n y p n y p n y p n y p n y p n y p n
Ja Ma Se Ja Ma Se Ja Ma Se Ja Ma Se Ja Ma Se Ja Ma Se Ja
$(1.00)
Cost per
Source: USDA AMS Iowa Ethanol Report, ISU Ethanol Profitability, EIA Gallon Revenue per Gallon
Allocation of Ethanol Supply Chain Profits between
Ethanol Producer and Corn Farmer
(corn at cost of production)
$1.20
$ per gallon
$1.00
$0.80
$0.60
$0.40
$0.20
$-
$(0.20)
$(0.40)
$(0.60)
TotalProfitability,
Source: USDA AMS Iowa Ethanol Report, ISU Ethanol Profits Corn
ISU Estimated Costs of Crop Production, EIA Farmer Profits
0
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0
0
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00
00
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P e r C u b ic F o o t D D G S P r ic e P e r T o n
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Selling Price
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