Thursday, February 08, 2007

Ethanol Feed Stocks and the related pricing

Probably the most common thinking when it comes to ethanol production includes using corn to produce the alternative fuel. Increased use in corn-based ethanol production has begun to drive up prices for corn and is creating a hardship on the people of Mexico. The population of Mexico considers that corn tortillas are akin to bread in the US and the rise in demand for corn in the US has begun to make even tortillas more expensive.

Meanwhile, other resources are being utilized to produce ethanol - sugar cane is one.
Sugar cane based ethanol is an up and comer in the area of ethanol production. Brazil has been doing it for quite some time now but, there is a new interest in producing sugar cane ethanol from Peru. The peruvian desert might be the next best place to produce ethanol due to the non tariff status on agricultural products imported to the US. According to Maple Cos., (the driver behind sugar cane ethanol in Peru) Peru's growing conditions, and low labor costs will make ethanol production cost effective. That combined with the duty-free status for importing into the US under terms of the Andean Trade Promotion and Drug Eradication Act is expected to give Maple an edge over other suppliers, even after accounting for the cost of shipping ethanol by tanker.

As you might have read, and likely would expect, the Midwest Region in the US has been enjoying what some are calling a 'Boom' in Biofuels. While most people first think of corn, which is the current top choice for producing ethanol / e85 in North America, it does not play a role when producing Biodiesel. The next contestant for producing Biodiesel is Chicken Fat. Yes, you read correctly, Chicken Fat Biodiesel. Another feature of the Midwest, Southeast Missouri to be more specific, is the Tyson Foods Inc. Poultry Plant, Dexter, Mo. Tyson is the nations largest producer of animal fat leftover from chicken, cattle, and hogs.

Ethanol Feed Stocks Create Higher Prices

Probably the most common thinking when it comes to ethanol production includes using corn to produce the alternative fuel. Increased use in corn-based ethanol production has begun to drive up prices for corn and is creating a hardship on the people of Mexico. The population of Mexico considers that corn tortillas are akin to bread in the US and the rise in demand for corn in the US has begun to make even tortillas more expensive.

corn tortillaMeanwhile, other resources are being utilized to produce ethanol - sugar cane is one.
Sugar cane based ethanol is an up and comer in the area of ethanol production. Brazil has been doing it for quite some time now but, there is a new interest in producing sugar cane ethanol from Peru. The peruvian desert might be the next best place to produce ethanol due to the non tariff status on agricultural products imported to the US. According to Maple Cos., (the driver behind sugar cane ethanol in Peru) Peru's growing conditions, and low labor costs will make ethanol production cost effective. That combined with the duty-free status for importing into the US under terms of the Andean Trade Promotion and Drug Eradication Act is expected to give Maple an edge over other suppliers, even after accounting for the cost of shipping ethanol by tanker.