The Renewable Fuels Monthly Report is produced as a partnership between the Agricultural Marketing Resource Center operated by the Value Added Agriculture Program at Iowa State Extension and Outreach (ISUEO), the Iowa Grain Quality Initiative (IGQI), an ISUEO program directed specifically at grain processing and handling, and is authored by Decision Innovation Solutions, LLC, an economic research and analysis firm located in Urbandale, Iowa.
Distillers dried grains with solubles (DDGS) is the main co-product of corn ethanol produced in dry-mill plants. Since 2007, on average, 97.1% of total DDGS production has come from dry-mill ethanol facilities with the remaining 2.9% coming from beverage distilleries (USDA-ERS, 2016a). Production and sales of DDGS make an important contribution to the total revenue of dry-mill ethanol plants, particularly during tight-margin situations. Monthly data from the Ethanol Profitability Model developed by Hofstrand (2016) indicate that for a typical dry-mill Iowa ethanol plant, both ethanol and DDGS revenues have declined since January 2012 (Figure 1), but on average from January 2012 to May 2016, 22% (± 3.0%) of the total revenue generated (from ethanol and DDGS sales) was contributed by DDGS sales.
Americans have renewed their interest in bigger cars, pick-up trucks, and sport utility vehicles (SUVs) over more fuel efficient small cars, mainly because of falling gasoline prices. This was highlighted in an interesting article, “American Drivers Regain Appetite for Gas Guzzlers,” published in the New York Times in June. We expected that when crude oil prices were averaging $95 per barrel three years ago, Americans would gravitate toward more fuel efficient small cars and stay away from SUVs and pickups.
According to www.motorintelligence.com, new passenger car sales were down by 7.7% from January to July 2016 compared with the same period last year. However, new light truck sales soared by 9.1% from January to July 2016 compared with the same period last year. Light trucks accounted for 58.4% of new vehicles sold in the first half of 2016, and the vehicle fleet is now weighted approximately 60-40 in favor of trucks in the United States, according to an analysis by Sam Ori published in Forbes magazine.
An excellent systematic review of 10 years of Renewable Fuel Standards by Gal Hochman from Rutgers University and David Zilberman from the University of California–Berkeley can be found on the IDEAS online bibliographic database.
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