Ethanol Goes Into The Red

Des Moines Register:

Figures from Iowa State University Extension confirmed that Iowa’s ethanol plants operated in the red during January, to the tune of 11 cents per gallon.
That comes after operating margins of 19 cents per gallon in December, 69 cents in November, 42 cents in October and 34 cents in September.
The first quarter is typically a tough period for ethanol as gasoline demand falls, but ethanol producers had feared a more severe downturn than usual this year due to continued high prices for corn and the loss of the 45-cents per gallon federal tax credit on Jan. 1.
The ISU figures showed ethanol plants paid an average of $6.19 per bushel for corn. Two years earlier the average price was $3.60 per bushel.
U.S. Department of Energy figures showed record amounts of ethanol in storage,  courtesy of a late-2011 demand surge from oil companies and distributors eager to take advantage of the last of the tax break. At the same time demand for motor gasoline fell sharply in January as prices began to rise.
Ethanol producers normally like to sell their product about 45 cents per gallon discounted to the wholesale unleaded gasoline price. But most recent futures prices on the Chicago Board of Trade show ethanol futures trading at a discount of 85 cents per gallon under the wholesale gasoline price of $3.05 per gallon.

$0.45 a gallon would have helped them out substantially.  All the experts are predicting high oil prices, so we'll see how competitive ethanol really is.  I'm guessing not as competitive as backers claim.