Ethanol Demands Concern Area Grain Elevators

Dr. Steve Amosson, AgriLife Extension Economist
Dr. Steve Amosson, AgriLife Extension Economist

As it stands right now, grain elevators serve as the middle ground in ethanol production.

But ethanol plants could soon cut the middle man out.

"They store a lot of their own corn, even on the ground. And thus, bypassing the elevators. Quite frankly it has put a few elevators out of business," said Dr. Steve Amosson, AgriLife Extension economist.

Amosson says an elevator in Plainview was forced to close. And other area elevators could follow if they do not diversify their business.

"The ethanol plant, yeah, they can pull away from this business," said Dale Lock, Attebury Grain manager. "We would have to figure out a way to be creative and other ways of making a living in the grain business."

That's because ethanol plants are starting to compete more heavily in the grain business, as well.

Distiller's grain is an ethanol by-product, which is much cheaper than feed grain. An increase in ethanol production would allow plants to transport distiller's grain directly to feed lots.

"If our elevators don't figure out how to handle that as it comes in and work as an intermediary and storage facility out to the feed lots, they could be left out in the cold," Amosson said.

But keeping up with ethanol plants will be difficult, he added, because feed lots will not be in the business of storing distiller's grain. He says the only way for them to survive is to amplify their storage capabilities to include other by-products.