NEW YORK – A spike in ethanol supplies has sent domestic prices tumbling to four-year lows, curbing profits for an industry that has posted robust earnings for most of this year, according to an article in the Wall Street Journal.

While it’s typical to expect declining demand after the summer driving season, this year’s downshift was particularly pronounced and falling domestic demand has left U.S. producers with the largest inventories in more than a year.

For U.S. consumers, the drop in ethanol prices may provide modest relief at the gas pump, but the weaker ethanol prices are bad news in the near term for the depressed U.S. corn market. With the price of ethanol currently about $1 a gallon less than gasoline, many refiners will blend as much ethanol into the fuel as they can.

The drop in ethanol prices comes as the $44 billion ethanol industry is grappling with other challenges. The Environmental Protection Agency is weighing a final decision on its proposal last year to cut its annual requirement for ethanol blending in gasoline, due in part to weak demand for blends containing more than 10% ethanol.

To learn more about ethanol, be sure to attend the NACS Show session, “Ethanol: How Could You?” on Wednesday October 8. Review all the NACS Show sessions and plan your show experience now!