US ethanol output at 2-year low as drought bites

Reuters
Wed Jul 18, 2012 11:17pm IST

* Ethanol output falls 19,000 bpd to 802,000 bpd
* Daily output lowest since records began in June 2010
* High heat causing plants to run less efficiently
* Stocks rise 24,000 to 19.56 mln bbls

By Karl Plume

July 18 (Reuters) - The worst U.S. drought in over 50 years has shriveled
crops, forced the culling of livestock herds, and slowed ethanol production,
putting more pressure on a biofuel industry already reeling from high corn
prices and poor margins.

Ethanol production last week fell to the lowest level since the U.S.
government began tracking the data in June 2010 because the oppressive heat
prompted plants to run at reduced rates.

Excessively high temperatures make it more difficult and time consuming to
cool the water used in ethanol production.

"Ethanol plants don't like heat and some of them aren't equipped to handle
excessive heat. It reduces efficiency and some of them were even reporting
electrical issues," said Jerrod Kitt, analyst with the Linn Group in Chicago.

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