As of September 2014, the rack price of ethanol was $2.19 versus $2.68 for unleaded gasoline—a difference of 49 cents per gallon. The ethanol rack price fell 5 cents from last month's price and was 39 cents lower than a year ago. Unleaded gasoline's average rack price fell 7 cents compared to last month's price and was 24 cents lower than a year ago. In the tables below, ethanol and unleaded gasoline rack prices per gallon, F.O.B. Omaha, are given for each month with an annual average for each year from 1982 to the present.
The year 2009 brought a record harvest corn crop, the news of which pushed corn prices down. Since corn is the top raw material cost for distillers, lower corn prices increased ethanol margins. While the ethanol industry saw shutdowns, bankruptcy filings and curtailments since late 2008, larger ethanol margins were welcome. U.S. ethanol production for 2009 was also expected to be higher than 2008 due to biofuel blending mandates calling for annual increases in corn ethanol. The ethanol average was $1.79 in 2009 compared to $2.47 in 2008 (a 28–percent decrease), and the unleaded gasoline average was $1.76 compared to $2.57 (a 32–percent decrease). Unleaded gasoline's average broke an upwards trend that started in 2002. Ethanol's average was at a level not seen since 2005.
The year 2008 brought crude oil prices to a peak soaring above $140 in July. Likewise, unleaded gasoline prices were volatile, reaching over $3, and then falling close to a dollar. The ethanol average was $2.47 in 2008 compared to $2.24 (a ten–percent increase) in 2007, and the unleaded gasoline average was $2.57 compared to $2.23 (a 15–percent increase). Unleaded gasoline's average fell in line with a trend that started in 2002. Ethanol's average was higher than 2007's average but still short of 2006's average.
The year 2007 brought additional operating capacity for ethanol and, with the additional supply, brought lower prices. Higher crude oil prices pushed unleaded gasoline prices higher. The average ethanol price for 2007 was lower than 2006, but the 2007 average unleaded gasoline price was higher than 2006. The ethanol average was $2.24 compared to $2.58 (a 13–percent decrease), and the unleaded gasoline average was $2.23 compared to $1.94 (a 15–percent increase).
The year 2006 brought the MTBE phaseout and the switch to ethanol as an additive. The average prices for 2006 for both ethanol and unleaded gasoline were higher than the average prices for 2005. The ethanol average was $2.58 compared to $1.80 (a 43–percent increase), and the unleaded gasoline average was $1.94 compared to $1.66 (a 17–percent increase).
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A general rule of thumb: An increase or decrease in the gasoline rack price is a clear indication of the direction of the gasoline price at the pump.