Ethanol Stocks Continue to Fall Hard

Ethanol stocks plummeted Thursday due to Wednesday's news of corn shooting up 14 cents and Bush finally showing concern over corn-ethanol.

VeraSun (-9.03%) and Aventine (-12.02%) hit new 52-week lows while Pacific Ethanol (-10.90%) neared its own of $4.20 a share.

Assisting the downfall was a report published by the Wall Street Transcript which set a bleak outlook for ethanol this year. In the report, Pavel Molchanov of Raymond James & Associates stated "a typical ethanol producer will be at best breaking even this year and possibly losing money on the bottom line" due to what has been a persistent margin squeeze.

March corn managed to stay unchanged Thursday.

Comments

[crowdofchee...:]

what do you expect, it's a fake industry. propped by govt subsidies, and an energy loser.

2008 Mar 07 09:02 PM

[wheels14:]

Dear crowdof ceerleaders,

Ethanol is not a net energy looser and the tax breaks it receives are a fraction of the tax benefits heaped on the large oil and gas producers. I paid $3.40/gallon for gasoline today.

2008 Mar 10 02:54 PM

[Mr. Wynn:]

How much did your food cost? A loaf of bread? A pound of hamburger meat? Any savings from this water-hungry product are wiped out by the fact that corn-based ethanol is a huge detriment to agriculture. Food prices are soaring and much of that has to laid at the doorstep of corn-based ethanol which takes more land, water, and energy to produce than it's worth. It's a net loser for the consumer, and all so we can say we're "green"!

2008 Mar 14 06:17 PM

[wheels14:]

Mr Wynn,
I paid $3.24 for a box of Corn Flakes. There is only 5 cents worth of corn in it. Most of your food cost increases comes from the cost of transporting the food to the processor and then again to the stores. Making ethanol does not take corn out of the food chain. They just remove the starch before they feed it to the cows. Feeding 10 lbs of corn to a cow to produce 1 pound of meat is more wastefull. That said, I had a steak yesterday.

2008 Mar 17 05:16 PM

[wheels14:]

Another point of Mr. Wynn that is incorrect. Ethanol is only responsible for a small amount of the increase in corn prices. Grain exports have gone up significantly in the last year. When people in China and India go from making $1/day to making $3/day they spend most of that wage increase on food. But if you follow the sales of farm equipment to second and third world countries you will see that farm productivity is increasing world wide. When American farmers were dumping corn on the world market at $1.95/bushel and getting a $1/bushel subsidy from the government, they were keeping the rest of the world from growing corn. Evan farmers in Argentina and Africa can't grow corn for $1.95/bushel. What does gasoline cost today?

2008 Mar 18 03:11 PM