Tough stretch for ethanol profitability

first_imgShare Facebook Twitter Google + LinkedIn Pinterest By Scott Irwin, Department of Agricultural and Consumer Economics, University of IllinoisThe U.S. ethanol industry faced considerable headwinds in 2018, including the lowest prices over the last decade, policy setbacks in the implementation of the RFS, and political resistance to granting a year-round RVP waiver for E15. The impact of these headwinds on ethanol production profits is certainly of interest to those in the ethanol industry, as well as policymakers and legislators interested in the financial health of the U.S. renewable fuels industry.A model of a representative Iowa ethanol plant was used to track the profitability of ethanol production. The model is meant to be representative of an “average” ethanol plant constructed in the last decade. There is certainly substantial variation in capacity and production efficiency across the industry and this should be kept in mind when viewing profit estimates from the model.Ethanol prices started 2018 at historically low levels of $1.25 per gallon, rose to a peak of $1.43 in April, and then fell most of the rest of the year, reaching a low of $1.06 in late November. The November low was the lowest weekly price for ethanol in this time period. DDGS prices were a bright spot for the ethanol prices for most of 2018, with prices generally ranging from 1.1 to 1.3 times the price of ethanol. This was a major turnaround in DDGS prices from 2017. The rise in DDGS prices was not enough to lift total revenue in 2018 above 2017 levels. Total revenue in 2018 averaged $1.75 per gallon compared to $1.76 per gallon in 2017.The cost of corn is the major input cost, about 70% of variable and fixed costs on average, and since the price of corn was relatively stable again in 2018, average total variable costs for the year of $1.55 per gallon was only slightly higher than in 2017.Net profits in 2018 averaged a loss of -$0.02 per gallon, compared to gains of $0.03 in 2017, $0.12 in 2016 and $0.07 in 2015. In reality, the pattern of net profits in 2018 was a tale of two periods. The average net profit from January through July was a respectable $0.05 per gallon. Mirroring the sharp decline in ethanol prices, returns from August through December averaged a loss of -$0.11 per gallon.Net profits turned negative in the second week of August 2018 and have remained so through the most recent week of available data. This is a run of 26 consecutive weeks of losses and counting.The shutdown price for an ethanol plant price equals variable costs minus non-ethanol revenue (DDGS and corn oil). The market price dipped below the shutdown price for the representative plant in late November 2018 for the first time since December 2012. The market price has remained very close to the shutdown price through early February 2019.There is no mystery as to the cause of the steep ethanol production losses in 2018. The U.S. ethanol industry was rocked by low prices in 2018, especially in the second half of the year when prices reached their lowest levels in over a decade. The real argument is the driving force behind the low prices. The ethanol industry has placed much of the blame for the low prices on small refinery exemptions (SREs) granted under the Renewable Fuel Standard (RFS) by the U.S. EPA. While there is no doubt that SREs have opened a backdoor mechanism for the EPA to reduce the statutory and obligated RFS volumes, the evidence shows that the physical use of ethanol has declined little if any during the last year. Instead, the evidence points to overproduction as the most likely explanation for the low ethanol prices.While domestic and export use for U.S. ethanol have increased since 2014, both production capacity and actual production have increased even faster. For example, ethanol production in the U.S. looks to have topped 16 billion gallons for the first time in 2018 and this has simply been too much for the domestic and export fuel markets to absorb. The result is that ethanol stocks have risen sharply and this has led to declining ethanol prices and profits.The 2018 net loss of -$2.2 million for the representative ethanol plant was the first annual loss since 2012 and only the fourth annual loss over 2007-2018. With the loss, the total cumulative (pre-tax) return to equity holders for the 2007-2018 period stands at $122 million, slightly less than the assumed equity investment for the representative plant of $126.6 million. We can use the average net loss for the representative plant to make a rough estimate of profit for the entire U.S. ethanol industry in 2018. Assuming all plants in the industry earned a net loss of -$0.02 per gallon and that total ethanol production for the U.S. was 16.1 billion gallons in 2018, aggregate ethanol industry (pre-tax) losses can be estimated at -$354 million.Finally, the percent return to equity holders provides useful information on the attractiveness of investment in ethanol plants relative to other investments. The average return was 8.3% over 2007-2018 and the standard deviation, a measure of risk, was 13%. By comparison, the average return for the stock market over this period, as measured by the S&P 500, was 8.7% and the associated standard deviation was 17.7%. The ratio of average return to standard deviation provides one measuring stick of an investment’s return-risk attractiveness, and on this measure the ratio for ethanol investment, 0.62, continues to compare favorably with the ratio for the stock market as a whole, 0.49. This provides important context when considering the losses experienced by ethanol producers in 2018. Even with this loss included in the data, ethanol plants have a more than respectable record of investment performance over the last dozen years.In 2018 the ethanol industry experienced its first losing year since 2012, thereby ending a run of 5 consecutive years of positive returns. The estimated loss for a representative Iowa ethanol plant in 2018 was -$2.2 million. While large, the 2018 loss was still far less than the -$6.7 million loss in 2012. The evidence points to overproduction as the driving force behind the low prices and financial losses experienced by ethanol producers during 2018. The fortunes of the U.S. ethanol industry are unlikely to improve until production and use are better balanced. This will require shuttering some production capacity, additional demand, or some combination of the two. The most optimistic scenario is additional demand for U.S. ethanol exports as part of a trade deal with China.last_img read more

Laziness Repels Success

first_img Essential Reading! Get my 3rd book: Eat Their Lunch “The first ever playbook for B2B salespeople on how to win clients and customers who are already being serviced by your competition.” Buy Now There are a lot of things that repel success. Your poor mindset and a bad attitude will certainly drive success away, and so will things like a lack of integrity and character. But perhaps nothing will drive success away from you like laziness.There a lot of forms of laziness that you may not recognize, but success knows them well and actively avoids them.Procrastination is a form of laziness. It’s an avoidance of the work that you need to do in order to produce the results you want. Your real priorities are visible in your actions, not you intentions, and intending to do your work isn’t the same as doing that work. Only one of these two things produces results, and only one of them generates success.Fake work is also a form of laziness. There are countless things that you can do—and that may even be necessary—that aren’t your real work. It’s the fake work you use as an excuse to avoid doing your real work, like replying to the unsolicited RFP instead of doing real prospecting work. Work that does not move the needle on the results you want isn’t going to draw success towards you.Distractions are another form of laziness. Choosing entertainment over producing work is really laziness. It’s a lazy mental focus, and a lazy habit. In a time of infinite distractions, focus is a defining differentiator, especially where success is concerned. If you aren’t focused on the things that build success, then success will pay you no heed.Success despises laziness. If you are not willing to do the work to generate the success you want, that success will not be forthcoming. Success demands that you put forth the effort to have what you want. If you believe that the secret to success is simply putting your intentions into the Universe, you will discover that the Universe can’t hear you unless you are making a lot of noise, and that noise is effort.last_img read more

IAF ex-sergeant sentenced to death

first_imgA local court here has sentenced a former Indian Air Force sergeant to death for the murder of a 27-year-old corporal in February 2017. Additional District and Sessions Judge Kanwaljeet Singh Bajwa sentenced Sailesh Kumar to death for the murder of Vipin Shukla of U.P. when both were posted at Bhisiana Air Force Station. The verdict was pronounced on Friday, officials said. The court also sentenced Kumar’s wife to five years’ rigorous imprisonment for destruction of evidence. The corporal had gone missing in February 2017. After thirteen days, his body was found chopped and packed in polythene bags, as per the police’s investigation. The Sessions Judge observed the accused, a member of the armed forces, should have shown courage in some other field, “in place of butchery”. He said, “It would be a mockery of justice and the conscience of society would be shocked, if death penalty was not awarded to him as his act was abhorrent and dastardly.last_img read more

Namajunas ready for what comes next as UFC’s new superstar

first_imgStronger peso trims PH debt value to P7.9 trillion “When they asked us what we wanted to be when we grow up, in kindergarten I always said I wanted to be a farmer,” she said.She’ll have to settle for the baddest woman in UFC.FEATURED STORIESSPORTSWATCH: Drones light up sky in final leg of SEA Games torch runSPORTSSEA Games: Philippines picks up 1st win in men’s water poloSPORTSMalditas save PH from shutoutNamajunas plowed through her competitors and landed in the biggest garden of ’em all — Madison Square Garden, and in the fight of her life at UFC 217. She left Joanna Jedrzejczyk in a battered heap and walked out the 115-pound UFC strawweight champion. With a buzzcut and steely determination that made a hybrid of some sort of Ripley meets Eleven sci-fi character, Namajunas dominated in a flash and thrust herself into the conversation as the new face of UFC.“I was the talk of the town that night,” she said. “I’ve always felt that I was a star. I always knew that I am a star. The only thing that was missing was the belt.” Oh, Namajunas has the belt in the suburban Denver home she shares with fiancee and training partner, Pat Barry. It’s in her closet.“It’s got an energy to it, you know? We want to make sure we don’t too wrapped up in it,” she said. “But we’ll shine it up. Give it some love.”Namajunas has felt nothing but love since winning a title on a card that fans, starting with UFC President Dana White, widely called one of the best in the company’s 25-year history. Namajunas, T.J. Dillashaw and Georges St. Pierre all won belts as challengers.“The UFC in general, we’ve been in kind of a weird spot lately,” she said. “That card is something that doesn’t come by very often. We haven’t seen a card like that in a really long time and it was something special to remember.”UFC has spent the year craving a new box office star that can carry the promotion into 2018 and beyond while stalwarts Ronda Rousey, Conor McGregor and Jon Jones are on the bench. UFC’s promotional push had been all-in on Jedrzejczyk, the Polish fighter who was a win away from matching Rousey with six straight title defenses.ADVERTISEMENT MOST READ Protesters burn down Iran consulate in Najaf PLAY LIST 01:37Protesters burn down Iran consulate in Najaf01:47Panelo casts doubts on Robredo’s drug war ‘discoveries’01:29Police teams find crossbows, bows in HK university01:35Panelo suggests discounted SEA Games tickets for students02:49Robredo: True leaders perform well despite having ‘uninspiring’ boss02:42PH underwater hockey team aims to make waves in SEA Games Namajunas is used to taking the shine off UFC’s brightest female stars.Paige VanZant’s rise into championship contention was chopped when Namajunas choked her out in 2015.Michelle Waterson was pegged as the next one until Namajunas choked her out, too, in April.And Jedrzejczyk?She was never a factor in their fight. Namajunas dropped her early in the first round with a big right hand, finished off a combination with a vicious left and pounced on a fallen Jedrzejczyk to finish her off.The MSG crowd that was solidly behind Jedrzejczyk during the walk to the cage roared with cheers whenNamajunas won. Namajunas choked back tears as White placed the championship belt on her shoulder.“I make my environment what I want it to be,” Namajunas said. “I went to her castle where she felt comfortable, where she wanted to be in New York City and I took it from her.”UFC announcer Joe Rogan said a superstar was born in New York.“I hope the UFC realizes, and I think they do, that’s a … star. That’s a real star,” he said this week on his “Joe Rogan Experience” podcast. “She’s a genuinely nice person. When you look like her and you’re 115 pounds and you’re a woman and you (mess) up the Boogeyman, yeah, crowds are going to gravitate to that. If she doesn’t become as a big a star as any other woman in MMA, I would be stunned.”Namajunas said that as champ, she wants to skip the brash trash talk that shot McGregor to mainstream stardom and has been imitated throughout UFC, including by the champions Jedrzejczyk, Michael Bisping and Cody Garbrandt, who all lost at UFC 217.Namajunas, who said she earned the nickname “Thug” as a kid from one of her neighbors, used her post-fightinterview to preach kindness. CPP denies ‘Ka Diego’ arrest caused ‘mass panic’ among S. Tagalog NPA Japan ex-PM Nakasone who boosted ties with US dies at 101 QC cops nab robbery gang leader, cohort Antetokounmpo leads Bucks past Spurs in Bledsoe’s debut John Lloyd Cruz a dashing guest at Vhong Navarro’s weddingcenter_img Brace for potentially devastating typhoon approaching PH – NDRRMC Kammuri turning to super typhoon less likely but possible — Pagasa View comments Read Next LATEST STORIES Typhoon Kammuri accelerates, gains strength en route to PH Rose Namajunas is announced before fighting Joanna Jedrzejczyk, of Poland, in a women’s strawweight title mixed martial arts bout at UFC 217 Saturday, Nov. 4, 2017, in New York. Namajunas won the fight. (AP Photo/Frank Franklin II)Rose Namajunas posed with a UFC championship belt around her waist and a tomato plucked from her garden in her hands.Namajunas has always had a bit of a green thumb, a labor of love passed on from her mother who could make strawberries blossom even in a tiny patch of yard in Milwaukee.ADVERTISEMENT Don’t miss out on the latest news and information. “This was the fight I had been fighting for,” she said. “Yes, the belt is a goal. But in this fight in particular, I wasn’t fighting for the belt but the bigger picture. Ever since I lost to (Karolina Kowalkiewicz), I decided I wanted to change the world.”Namajunas has said she was a victim of abuse and violence in a childhood complicated by watching her father suffer from schizophrenia. She also spoke out against the toxic atmosphere she found early in her MMA training at Roufusport. As Namajunas takes a turn trying to steer the women’s division into the future, she hoped she could serve as role model for someone looking for a voice.“Of course I want to leave things, especially negative things, in the past,” she said. “But if it can help somebody overcome something, then I want to make sure it ends up on a positive note. I don’t want to dwell on negative things.”The big negative in New York? Someone played the wrong walkout song. She requested “Sweet Freedom” by Michael McDonald.“They played some Oasis song or something,” Barry said.“It was definitely not my type of music,” Namajunas said.Namajunas planned to take some time off headed into the holidays and had no contender or timeframe in mind for her first title defense.She just knows that next time, everyone will be watching for her.last_img read more

10 months agoDONE DEAL: Wolves winger Jordan Graham joins Oxford

first_imgDONE DEAL: Wolves winger Jordan Graham joins Oxfordby Paul Vegas10 months agoSend to a friendShare the loveWolves winger Jordan Graham will join Oxford United on loan in January until the end of the season.Graham, 23, was due to be on loan at Ipswich Town for the entire campaign but that agreement was cut short.The former Aston Villa man spent time on loan at Oxford in 2015 and will return to the League One club when the transfer window opens.”I feel so happy to be back and it’s a pleasure to come back,” Graham said in a video on social media. TagsTransfersLoan MarketAbout the authorPaul VegasShare the loveHave your saylast_img

10 months agoChelsea boss Sarri pleased with matchwinner Kante: He’s improving

first_imgAbout the authorPaul VegasShare the loveHave your say Chelsea boss Sarri pleased with matchwinner Kante: He’s improvingby Paul Vegas10 months agoSend to a friendShare the loveChelsea boss Maurizio Sarri was delighted with matchwinner N’Golo Kante for victory at Crystal Palace.The midfielder struck the only goal of the game.Sarri stated: “He has to think about the defence first of all. Then he is improving, especially in movements without the ball. His movement today was really very good and was done with the right timing.”When we have to play against opponents who are very low, it’s difficult for the striker and wingers to find space. So for us the midfielders’ movement without the ball is very important.”Now we have to work on Loftus-Cheek and on Barkley. Loftus-Cheek especially is a great player with the ball, but he can improve a lot in his movement without the ball.” last_img read more

Secondhand Ultramax Joins Genco Shippings Fleet

first_imgzoomIllustration. Image Courtesy: Pixabay under CC0 Creative Commons license Dry bulk specialists Genco Shipping & Trading Limited has taken delivery of the recently acquired 61,000 dwt Ultramax vessel.The Genco Weatherly is the first of six vessels to be delivered to Genco as part of its recent agreements to acquire the secondhand ships.Besides the 2014-built Ultramax, the company reached a deal to purchase two 2015-built 180,000 dwt Capesize vessels and another 2016-built 60,000 dwt Ultramax vessel.In addition, Genco entered into another agreement to acquire two 2016-built 180,000 dwt Capesize vessels.All of the units are expected to be delivered to Genco in the third quarter of 2018.last_img

TD Bank acquires Torontobased artificial intelligence startup Layer 6 AI

first_imgTORONTO – Toronto-Dominion Bank is acquiring artificial intelligence startup Layer 6 AI for an undisclosed amount as financial services companies increasingly look to tap the technology’s potential.Canada’s largest bank by assets has been looking to build up its capabilities in AI for some time, said Michael Rhodes, group head of innovation, technology and shared services.“The mass amounts of data with increases in computing power really give rise to the ability for machine learning, or artificial intelligence, to really play a much more prominent role,” he said.Toronto-based Layer 6, which launched in late 2016, uses AI in its platform to analyze various forms of data to learn and anticipate an individual customer’s needs.Layer 6 will retain its brand name and separate office in Toronto’s Yorkville area, but TD will become its sole client and customer, said Rhodes.TD’s acquisition comes after it announced in October 2017 an agreement with U.S.-based Kasisto to integrate its KAI Banking chatbot platform into the bank’s mobile app.This also comes as corporate interest in AI and its potential continues to mount.Canadian AI companies saw record funding in the first three quarters of 2017, receiving $191 million across 22 deals, according to PwC Canada.Royal Bank of Canada has been investing in AI research, setting up labs in Toronto and Edmonton, as well as one in Montreal in November 2017. RBC, Canada’s largest bank by market capitalization, also last January tapped AI pioneer Dr. Richard S. Sutton as an academic adviser.Meanwhile, the federal and Ontario governments have doubled down on AI, collectively investing $100 million in a Toronto-based research institute. The Vector Institute, which opened in March 2017, was also set to receive $80 million from more than 30 private sector companies.Both TD and RBC are Vector Institute partners, while Layer 6 founders Jordan Jacobs and Tomi Poutanen are Vector Institute founders.Jacobs said after the startup’s launch in late 2016, it began doing work for various clients, including TD, last spring.After Layer 6 won an international competition last August for the best recommendation system — called the RecSys Challenge — and as it began looking to raise more money from venture capital that fall, the startup began getting acquisition approaches, he said. Jacobs would not specify which companies, but said the interest came from a variety “both inside and outside of Canada.”He said the startup, which now employs 17 people, was at an “inflection point” and needed to raise money to grow and meet demand. Its decision was guided by its aim to “build a global AI ecosystem in Canada,” he said.“If we go and we raised a ton of money from foreign investors, at some point along the way we essentially stop being a Canadian company even if we’re located here,” said Jacobs. “And for us, this was an opportunity to build inside a global company that is Canadian, TD, and to help them leap to the front of the pack around the world in adopting AI.”While neither firm would detail exactly how the technology would be applied at TD, Rhodes said this could include detecting certain spending patterns that indicate a customer may be buying a house and offer a mortgage. Or, in the future, applications could include the ability to analyze call centre audio and identify disgruntled customers who make multiple calls, and offer additional measures to address their issues, he said.Given the growing number of ways customers interact with their banks, such as via smartphone apps, online, social media as well as through call centres and branches, it has become much more difficult to monitor customer needs, he said.“What we hope to gather from AI is the ability to kind of know and understand our customers, in the same way that store manager knew back in the 1970s,” Rhodes said.last_img read more

Gov Amazon largest jobs commitment in Tennessee history

first_imgNASHVILLE — Gov. Bill Haslam said Tuesday that an Amazon operations hub expected to create 5,000 jobs in Tennessee will be “the single largest jobs commitment made by a company in Tennessee’s history.”Amazon will invest $230 million-plus to locate its Operations Center of Excellence in Nashville Yards, a 15-acre (6-hectare), mixed-use downtown development still under construction in the booming southern city. Holly Sullivan of Amazon Public Policy says Nashville will become the eastern U.S. hub for its retail operations division, with hiring to begin next year.Amazon announced the Nashville site the same day it revealed it would split its much-anticipated second headquarters between New York and Arlington, Virginia, each getting 25,000 jobs.“This is a game changer for Tennessee. The ripple effect of Amazon’s decision to invest $230 million in our state and create 5,000 high-paying jobs in downtown Nashville will be felt for years to come,” Haslam said in a statement.Amazon’s new 1 million square-foot Nashville office space will host tech and management functions, including customer fulfilment, customer service, transportation and supply chain. The project is expected to add an estimated incremental tax revenue of more than $1 billion over the next 10 years, according to the company.Amazon says it will receive up to $102 million in performance-based incentives based on the creation of 5,000 jobs with an average wage exceeding $150,000 in Nashville.“We think it’s just a great location for our employees, but also a great location to really further the resilience and the vibrancy, and just the overall coolness of Nashville, Tennessee,” Sullivan said Tuesday at a news conference with Gov. Haslam.The company received 238 proposals for its new headquarters before narrowing it down to 20 in January, a shortlist that included Nashville.Haslam said that in the past 30 days or so, the conversation shifted toward the possibility of the smaller hub in Nashville. For perspective, Haslam said the Amazon headquarters proposal could have resulted in 50,000 new jobs in one location, and Nashville currently only has 70,000 jobs downtown.“I think we realized, Nashville realized and Amazon realized, to do something that big, as much as Nashville has grown, would still be a challenge to infrastructure and to the talent demand,” Haslam said at the news conference.Amazon’s choice also followed the resounding defeat of a multibillion-dollar Nashville transit ballot measure in the May election, a plan that banked on tax increases to introduce a light rail system, expand bus routes and build a downtown underground tunnel. In fielding proposals for the second headquarters, Amazon stressed the importance of direct access to mass transit.Nashville Mayor David Briley said the city still continues to invest in expanding its existing transit system.Amazon’s incentives package includes a cash grant for capital expenditures from the state of $65 million based on the company creating 5,000 jobs over the next seven years — equivalent to $13,000 per job.Meanwhile, Nashville has agreed to give up to a $15 million cash grant based on each job created within the same timeframe. The annual payment from the city, however, will be dependent on the actual number of employees added.Finally, Amazon will receive a job tax credit to offset 50 per cent of Tennessee’s franchise and excise taxes based on $4,500 per job over the next seven years — worth about $21.7 million.A free market think-tank, Beacon Center of Tennessee, became a quick critic of the deal. Beacon Center spokesman Mark Cunningham said officials “got scammed into giving the company more than $100 million in taxpayer giveaways for a consolation prize.”But Briley and Haslam contended that Nashville and the state are getting great deals that will quickly pay themselves off. Haslam said he expects 1.6 more jobs in the state for every direct job created, for a total of 13,000-plus.The state says Amazon currently has six Tennessee facilities employing more than 6,500 people.___Associated Press writer Kimberlee Kruesi in Nashville contributed to this report.Jonathan Mattise, The Associated Presslast_img read more

New Mayor elected in Tumbler Ridge

first_imgTUMBLER RIDGE, B.C. – Keith Bertrand has been elected the Mayor of Tumbler Ridge.  In a four-way race, Bertrand defeated incumbent Don McPherson by only 13 votes.McPherson ended up with 238 votes followed by Garret Golhof at 163 and Jerrilyn Schembri with 114.The three incumbent Councillors running for reelection will all return for the next four years.  Joanne Kirby, Will Howe and Darryl Krakowka will be joined by three new Councillors, Chris Norbury, Bernie Lehman and Curtis Miedzinski. SearchSearch inCandidateVotesElected CandidateVotesElected SearchSearch inCandidatesVotesElected CandidatesVotesElected Don McPherson238 Jerrilyn Schembri114 Garret Golhof163 Keith Bertrand251X Tumbler Ridge – Councillor Here are the full election results. Tumbler Ridge – Mayor Chris Norbury611X Curtis Miedzinski448X Bernie Lehmann532X Stacey Lajeunesse214 Darryl Krakowka502X Joanne Kirby396X Will Howe426X Monty Hendrickson343 Barry Blackman139last_img read more