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Rough stretch for ethanol plants isn’t over yet

The CEO of an ethanol plant in southeast Minnesota does not anticipate a correction for negative crush margins anytime soon.

Randall Doyal with Al-Corn Clean Fuel in Claremont says several headwinds combined with exceptional capacity have driven ethanol prices down.

“For years people were talking about capacity creep, and I kept saying ‘no it’s capacity leap.’ You don’t understand how much it’s growing. Now everyone is aware of the fact our industry is probably 17 billion (gallon)-plus in capacity, and we don’t have a market nearly that big. That’s a problem.”

He attributes lost market share to small refinery exemptions and trade disruptions that closed key export markets like China.

Speaking to Brownfield at the National Ethanol Conference in Orlando, Doyal tells Brownfield the industry is cyclical.

“Don’t get scared, we’re going to go through some tough times. So (does) farming. That’s the nature of being in a commodity business. You have to be able to survive it, and we will.”

Al-Corn recently completed a plant expansion.  Doyal says while the timing is a little rough, the downturn in ethanol prices was somewhat expected and they are working their way through it.