While most of the news around ethanol seems to focus on its issues with the government, a new analysis shows that the green fuel is in one of its longest profitability runs ever. This analysis from the University of Illinois shows that despite more recent news about troubles with the Environmental Protection Agency (EPA) and its proposal to cut the amount of ethanol in the Nation’s fuel supply, things have been pretty positive for the ethanol industry lately.

There have been basically four sub-periods in terms of net profits: i) high profits from 2007 through mid-2008, ii) breakeven from mid-2008 through the end of 2011, iii) losses for 2012 through early 2013, and iv) high profits again from spring 2013 through the present. The most recent period is the longest run of uninterrupted profits since the series began in early 2007. During this one-year run, profits averaged $0.93 per bushel of corn processed and reached a new high of $2.55 per bushel in early December 2013. The picture presented here is certainly not one of an industry that has suffered because of recent policy proposals.

The author cites several factors that could keep the recent run of profits from continuing for a longer period of time, including DDGS prices at unprecedented high levels, as well as documented “co-integrating” relationship between ethanol and corn prices, simply, if the ethanol price is too high relative to corn prices, then either the ethanol price must fall or the corn price must rise.