U.S. ethanol makers eye pros and cons of corn alternatives
Taking those factors into consideration, some industry players say wheat needs to be 60 cents to $1 per bushel per bushel than corn to make the economics attractive.
POET on Thursday in Portland, Indiana, was bidding $7.42 per bushel of corn and $6.90 per bushel of wheat - a difference of 52 cents, according to the company's website.
Babcock said "isolated incidences" of ethanol makers using wheat along with corn were to be expected, but he said such substitutions would remain limited to specific locations where the pricing and other market factors were favorable.
"The corn plants really are configured and set up to receive corn, grind it and ferment it," he said.
Carl Benck, president of United Wisconsin Grain Producers, which produces 58 million gallons of ethanol a year, also said the high price of corn made mixing in other feedstocks an attractive option for some.
"Corn is extremely expensive and getting more so every day," he said.
Still, wheat is not quite cheap enough yet for many players.
The ethanol group of The Andersons Inc, which operates four Midwestern plants with 330 million gallons of capacity explored a substitution of wheat for corn in past years but was not pursuing a switch at this time.
Likewise, Commonwealth Agr-Energy, a farmer-owned ethanol producer, said wheat was a consideration every year but only once in its years of operation did it actually become financially feasible.
- TekWear partners up on new crop monitoring technologies
- Harvest delays impact crop performance, study shows
- Hogs were the exception to the bullish rule Thursday
- Sugarcane aphids found in North Carolina
- Online registration open for Dec. 15-16 AGMasters conference
- Export data, equity gains boost crop futures Thursday morning
- How much corn can the ethanol industry use?
- Economist: Taxing P could reduce risk of algal blooms
- Commentary: Government wants farmers to quit farming
- Ag markets made a generally mixed showing Thursday night
- What is the relationship between maturity group, yield?
- Commentary: Ambulance-chaser lawyers take on Syngenta