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Corn Ethanol Processing Technology, Cost of Production, and Profitability

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  • Gallagher, Paul

Abstract

The typical corn ethanol processing facility is a dry mill. Dry mills grind dry corn to produce ethanol and a composite coproduct called distillers’ grains, which consists of the residual corn components after starch is removed for ethanol production. The size of dry mills constructed during the last 15 years has increased from about 15 million gallons per year (MGY) to 40-100 MGY. The baseline processing plant in this section uses natural gas for distillation and drying distillers' grains, and purchased electricity powers the plant. A plant that dries distillers' grains can move the product by truck, rail, barge, or ship to international markets. Distillers' grains can also be fed “wet” to livestock, but distribution is limited by transportation costs. The estimated costs of production for a typical plant in May 2015 are shown in Table 4.1. A total of $1.30 per gallon was sufficient to recover total production costs.

Suggested Citation

  • Gallagher, Paul, 2015. "Corn Ethanol Processing Technology, Cost of Production, and Profitability," ISU General Staff Papers 201509010700001045, Iowa State University, Department of Economics.
    • Handle: RePEc:isu:genstf:201509010700001045
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