High corn prices add to Pacific Ethanol loss

[DainBramaged]

With the ethanol industry still facing difficult market conditions, Sacramento's Pacific Ethanol Inc. reported a $54.9 million quarterly loss Monday.

About half the loss was a non-cash expense, the write-down of its investment in a mothballed plant in the Imperial Valley. But the company experienced significant cash losses, too. The main culprit was wild fluctuations in the price of ethanol and the chief ingredient used to make it, corn. Similar problems have bedeviled others in the industry.

During the third quarter, Pacific Ethanol sold more ethanol at higher prices than a year ago. But the hefty increase in revenue was overwhelmed by high corn prices, said Chief Financial Officer Joseph Hansen. Corn soared well above $6 a bushel during the quarter, the company said.

The immediate road ahead isn't easier. The price of corn has recently plunged, but so has ethanol, a fuel additive, which tends to fall with the price of gasoline, said investment analyst Joseph Gomes of Oppenheimer & Co. in New York.

Ethanol prices have fallen from an average of $2.45 a gallon during the third quarter to about $1.80.

http://www.sacbee.com/103/story/1386955.html



With the downturn in fuel prices, with ethanol following closely behind, the corn bubble will burst and corn prices will tumble and supply will increase, bringing food prices down.

To everything turn, turn, turn, there is a season turn turn turn.

[aquart]

1. Well, that worked out badly, didn't it?

[DainBramaged]

2. Like all bubbles, no one foresees the point of bursting, greed takes over

[Parche]

3. DONT use food items for ethanol

Use cellulostic ones...........:grr: :hi:

[DainBramaged]

4. They don't want to listen, it was a HUGE conspiracy in my opinion

between the corporate farms and the ethanol producers. :hi:

[StreetKnowledge]

9. Yep.

Takes a lot less energy to make ethanol that way, too. O8)

[itsrobert]

5. I make out better buying regular gas here in San Diego

Gasoline is just a few cents higher than Ethanol right now. Regular Gasoline gives my Chevy Impala better gas mileage. Plus the regular gas station is closer.

[DainBramaged]

6. You bet, that's the downfall when gas and ethanol are at parity

gas will always give better millage. :hi:

[create.peace]

7. not to mention that ethanol uses so many petrochemicals including petrol

[madrchsod]

8. corn based fuel is/was the first step.

corn based fuel should be used in the production of food not to fuel cars. waste or non food crops is the only sensible way to fuel cars