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Ethanol and Unleaded Gasoline Average Rack Prices

Nebraska farmers were expected to harvest their largest corn crop on record, 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 has seen shutdowns, bankruptcy filings and curtailments since late last year, larger ethanol margins would be 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.

As of December 2009, the rack price of ethanol was $2.15 versus $2.01 for unleaded gasoline--a difference of 14 cents per gallon.  The ethanol rack price increased one cent from last month's price and 54 cents higher than a year ago.  Unleaded gasoline's average rack price decreased five cents compared to last month's price but was 94 cents higher than a year ago.