Ethanol plant profits good for now, questionable down the road

OK, we finally have a post that offers a critical look at the mushrooming ethanol production plant trend. Jon Chavez, writing in the Toledo Blade, talks to a lot of industry folks and finds the general consensus to be that ethanol plant profits will be pretty good for the next few years, but after that it's going to be a rocky road.

The key to understanding the situation is summed up in a paragraph towards the end of the article. "Unlike some investments with only a few unknowns, ethanol has up to five price variables that affect plant profits: corn, ethanol, oil, natural gas, and transportation," Chavez writes. Since these five variables are constantly changing, anyone claiming to know what will happen in five years (including Chavez) is making a bold claim. Still, it's good to hear at least some dissent in the go-go ethanol boom seen 'round the country.

[Source: Toledo Blade, hat tip to Joel A]

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