Poor Margins in the Ethanol Business

CHS Senior Vice President John Griffith, who oversees renewable fuels, says the trade war is impacting ethanol. “There are significant tariffs on ethanol going to China with a roughly 70 percent tariff rate. We have significant excess capacity in ethanol production in the U.S. and that is really starting to hurt the margins.” Unless conditions improve, less efficient ethanol plants may be forced to shut down or limit production. Year-round usage of 15 percent ethanol blended fuels would be helpful. “This business is influenced by fractions of a percent. That lift in ethanol demand would be enormous.”