Companies such as Green Plains Renewable Energy and Poet LLC are diversifying production by pulling some of their corn away from an ethanol market where, according to the Energy Information Administration, future demand will be little-changed from 2011.
Ethanol producers are getting pinched by a combination of factors, including the fact that the 30-year corn-ethanol government subsidy was terminated at the end of last year. Supply is high as producers have ramped up to meet requirements of a US government that's pushed for a higher ethanol percentage in the standard US fuel blend as a way to cut oil dependency. Meanwhile, automakers and other entities are saying that the 15-percent ethanol blend (aka E15) may damage engine parts because of its higher alcohol content. Most recently, earlier this month the AAA said that government should put the kibosh on E15 sales until more consumers are educated about the product.