Ethanol News
United Ethanol • Growing To Meet Your Needs
Ethanol News 1250 Chicago St. • Milton, WI 53563 • (608) 868-5900 • www.unitedethanol.com
August 2017
Greetings from the CEO David Cramer President and CEO Contents Greetings from the CEO ................... 1 Production Rates Up.. 2 Second-quarter financials .......... insert
This time of year we start to think about harvest. As we all know this has been a wet year to date. United Ethanol is fortunate to have a partner like United Cooperative to rely on for corn deliveries with their extensive network of elevators across the state. This minimizes our risk when it comes to having adequate corn supplies. Let’s hope we get a couple of timely rains in August to finish the corn crop that is out there. The plant has been running very well and is on pace to produce over 50 million gallons of ethanol this year. As of June 30, 2017, United Ethanol produced 25,175,832 gallons of ethanol. We also produced 69,933 tons of dried distiller’s grains, 35,413 tons of liquefied carbon dioxide and extracted 6,020,996 pounds of corn oil. All of these unit numbers are well above last year’s six-month numbers. As you will see by the unaudited financial statement, United Ethanol’s net income year-to-date is improved over a million dollars from a year ago. If that continues for the balance of the year, United Ethanol should have a solid performance in 2017. Prices for dried distiller grains (DDGs) have improved, and for each of the last eight months, DDGs revenue have increased for United Ethanol. United Ethanol is a part of the large picture the Upper Midwest has within the ethanol industry. In January U.S. ethanol production capacity reached 15.5 billion gallons per year, according to the U.S. Energy Information Administration’s most recent U.S. Fuel Ethanol Plant Production Capacity report. Total capacity of operable ethanol plants increased by about four percent—or by more than
600 million gallons per year—between January 2016 and January 2017. Most of the 198 ethanol plants in the U.S., representing most of the U.S. fuel ethanol production capacity, are located in the Midwest region. Total nameplate capacity in the Midwest was 14 billion gallons per year at the beginning of 2017, an increase of about 4 percent between January 2016 and January 2017. As you can see a lot of plants are increasing capacities. This does have an effect on prices paid for ethanol. If we have excess inventories, the price comes down. When we have tight inventories, the price does improve. As the industry continues to produce more we will have to either use more or export more. I feel we have a very good product and the consumers are using more each year. Will demand keep up with production? That is the key question. As owners of a production plant we need to use and promote our product. Hopefully, when you have the option to use a higher blend of ethanol you choose one. We all need to become more assertive in promoting ethanol and our future will continue to be bright. Hopefully our weather pattern gets more normal, crops finish, and we have good harvest going when we touch base in November. Enjoy the remainder of the summer! Cooperatively yours, David Cramer, President and Chief Executive Officer
1250 Chicago St. Milton, WI 53563 This newsletter is compliments of United Ethanol, LLC and is distributed to United Ethanol, LLC investors.
Production Rates Up
By: Chad Campbell, Chief Operating Officer Summer production rates at United Ethanol are at all-time highs. Improvements to the plant the last few months have automated processes that set the pace for breaking 50 million gallons of undenatured ethanol for 2017. Through six months, the plant is at 25 million gallons.
The production team has done an excellent job of getting the production rate to this level. Through recent automation projects that sequence programming of the distributive control system, the plant has been not only able to reach these higher production rates, but also operate 24/7 with less people. Any manufacturing facility that is online 24/7 needs people around the clock, so if we can embrace technological automation to produce quality products, and help the plant raise its production rate, that is a win-win for United Ethanol. The corn oil production rate, which is the second most valuable product at the plant, is up, also. Prices for dried distiller grains (DDGs) are creeping up. For a few months this past year DDGs became the lowest priced protein feed available in the world. Prices were low, and United Ethanol was able to export a record amount of tons of DDGs in the last 6 months. Even though China pulled out of the market, we still exported a record amount. We did see a substantial gain in DDG prices for the first time in 8 months. Even though the price dropped a year ago, our forward contracts postponed the impact to our business by a couple months. I don’t need to tell you, but Wisconsin’s corn crop is wet. United Ethanol is still grinding 2016 corn. We are watching the 2017 crop very closely and next month plan to establish a basis for our corn price.
Ethanol News 1250 Chicago St. • Milton, WI 53563 • (608) 868-5900 • www.unitedethanol.com
August 2017
Greetings from the CEO David Cramer President and CEO Contents Greetings from the CEO ................... 1 Production Rates Up.. 2 Second-quarter financials .......... insert
This time of year we start to think about harvest. As we all know this has been a wet year to date. United Ethanol is fortunate to have a partner like United Cooperative to rely on for corn deliveries with their extensive network of elevators across the state. This minimizes our risk when it comes to having adequate corn supplies. Let’s hope we get a couple of timely rains in August to finish the corn crop that is out there. The plant has been running very well and is on pace to produce over 50 million gallons of ethanol this year. As of June 30, 2017, United Ethanol produced 25,175,832 gallons of ethanol. We also produced 69,933 tons of dried distiller’s grains, 35,413 tons of liquefied carbon dioxide and extracted 6,020,996 pounds of corn oil. All of these unit numbers are well above last year’s six-month numbers. As you will see by the unaudited financial statement, United Ethanol’s net income year-to-date is improved over a million dollars from a year ago. If that continues for the balance of the year, United Ethanol should have a solid performance in 2017. Prices for dried distiller grains (DDGs) have improved, and for each of the last eight months, DDGs revenue have increased for United Ethanol. United Ethanol is a part of the large picture the Upper Midwest has within the ethanol industry. In January U.S. ethanol production capacity reached 15.5 billion gallons per year, according to the U.S. Energy Information Administration’s most recent U.S. Fuel Ethanol Plant Production Capacity report. Total capacity of operable ethanol plants increased by about four percent—or by more than
600 million gallons per year—between January 2016 and January 2017. Most of the 198 ethanol plants in the U.S., representing most of the U.S. fuel ethanol production capacity, are located in the Midwest region. Total nameplate capacity in the Midwest was 14 billion gallons per year at the beginning of 2017, an increase of about 4 percent between January 2016 and January 2017. As you can see a lot of plants are increasing capacities. This does have an effect on prices paid for ethanol. If we have excess inventories, the price comes down. When we have tight inventories, the price does improve. As the industry continues to produce more we will have to either use more or export more. I feel we have a very good product and the consumers are using more each year. Will demand keep up with production? That is the key question. As owners of a production plant we need to use and promote our product. Hopefully, when you have the option to use a higher blend of ethanol you choose one. We all need to become more assertive in promoting ethanol and our future will continue to be bright. Hopefully our weather pattern gets more normal, crops finish, and we have good harvest going when we touch base in November. Enjoy the remainder of the summer! Cooperatively yours, David Cramer, President and Chief Executive Officer
1250 Chicago St. Milton, WI 53563 This newsletter is compliments of United Ethanol, LLC and is distributed to United Ethanol, LLC investors.
Production Rates Up
By: Chad Campbell, Chief Operating Officer Summer production rates at United Ethanol are at all-time highs. Improvements to the plant the last few months have automated processes that set the pace for breaking 50 million gallons of undenatured ethanol for 2017. Through six months, the plant is at 25 million gallons.
The production team has done an excellent job of getting the production rate to this level. Through recent automation projects that sequence programming of the distributive control system, the plant has been not only able to reach these higher production rates, but also operate 24/7 with less people. Any manufacturing facility that is online 24/7 needs people around the clock, so if we can embrace technological automation to produce quality products, and help the plant raise its production rate, that is a win-win for United Ethanol. The corn oil production rate, which is the second most valuable product at the plant, is up, also. Prices for dried distiller grains (DDGs) are creeping up. For a few months this past year DDGs became the lowest priced protein feed available in the world. Prices were low, and United Ethanol was able to export a record amount of tons of DDGs in the last 6 months. Even though China pulled out of the market, we still exported a record amount. We did see a substantial gain in DDG prices for the first time in 8 months. Even though the price dropped a year ago, our forward contracts postponed the impact to our business by a couple months. I don’t need to tell you, but Wisconsin’s corn crop is wet. United Ethanol is still grinding 2016 corn. We are watching the 2017 crop very closely and next month plan to establish a basis for our corn price.
