Iowa Secretary of Agriculture Bill Northey continues to be bullish on ethanol, despite tight margins for producers.
Speaking on Iowa Public Television’s Iowa Press program Sunday, Northey disagreed with a reporter’s question that losing the blenders tax credit has put the ethanol industry on “quicksand” and could be sinking. “No, ethanol is certainly very strong,” Northey said. “We have 41 ethanol plants in Iowa. Produce over 3 billion gallons of ethanol a year and we actually lost those tax credits last December 31st. So, we have been operating the first five months of this year without that 45 cent a gallon tax credit.”
Northey admitted that the ethanol plants are operating on very tight margins right now but they are still open. “There is some belief that maybe a few of those will slow down over the summer depending on what grain prices are and the availability of corn,” he said. “These plants have gotten more efficient and then we have the next generation of plants. We have some cellulosic ethanol plants that are in the process of groundbreaking or letting bids for new production facilities. So, I think we have that next generation that is coming as well.”
Northey, who is a corn farmer and former president of the National Corn Growers Association, says that ethanol has had a positive impact on the state’s agriculture industry overall, even for livestock producers because of the co-product distillers grains (DDGS). “So, corn goes in the front, the starch is used for ethanol, the product coming out of the back is distillers dry grains and solubles. That is a wonderful cattle feed and we are actually seeing an increase in the number of cattle fed in Iowa because of that,” Northey added.