USDA’s 2002 ethanol cost-of-production survey

Jul 2005

Ethanol is a clean renewable gasoline additive produced from domestically grown feedstocks such as corn, sorghum, barley, and wheat. In 1980 to 2004, the ethanol industry and its role expanded significantly. Ethanol production capacity increased from 200 million gallons per year in 1980 to over 3,600 million gallons by late 2004. During the same period, the number of ethanol plants increased from fewer than 20 to more than 80. More than 1.35 billion bushels of corn were used in ethanol processing in 2004. Roughly equal amounts of corn were used for food, seed, and other industrial uses.
A questionnaire to collect information about ethanol processors for 2002 from dry- and wet-mill ethanol plants was designed by the Office of Energy Policy and New Uses, U.S. Department of Agriculture (USDA), and Bryan and Bryan Inc. International (BBI)—an ethanol consulting company in Cotopaxi, CO. The packages sent to ethanol producers contained a survey questionnaire, cover letter, confidentiality agreement forms, and a copy of the previous survey (Shapouri, Gallagher, and Graboski, 2002). BBI conducted ethanol production cost interviews during 2003.
The survey provided a complete picture of the dry-mill industry in 2002.
Thirty-four dry-mill ethanol plants responded to the survey, accounting for 30 percent of national dry-mill capacity. However, 13 of the responses were incomplete and were not usable. So this report summarizes the results of the 21 dry-mill ethanol plants. These ethanol plants produced about 550 million gallons of ethanol in 2002. The wet mills did not participate in the survey.
The primary goal of the survey was to obtain costs of production. But it also surveyed and report results for other aspects of firm performance, such as processing yields input requirements and marketing practices for ethanol and byproducts.

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