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USDA's 2002 Ethanol Cost-of-Production Survey

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  • Shapouri, Hosein
  • Gallagher, Paul

Abstract

In 2003, the U.S. Department of Agriculture surveyed 21 dry-mill ethanol plants to estimate their 2002 production costs, including both variable (feedstock and plant operation) and capital expenses. These plants produced about 550 million gallons of ethanol in 2002. Net feedstock costs for the surveyed plants ranged from 39 to 68 cents per gallon in 2002. For cash operating expenses, the average energy expenditure was 17.29 cents per gallon. Labor costs ranged from 3 to 11 cents per gallon, maintenance costs from 1 to 7 cents, and administrative costs from 1 to 18 cents. For capital expenditures, new plant construction costs from $1.05 to $3.00 per gallon of ethanol. Average investment to expand existing ethanol production capacity was 50 cents per gallon; hence, expansion tends to cost less than new capacity. Comparison with a 1998 survey of ethanol producers showed that total operating costs in 2002 had changed very little from 1998. It also showed that the average cost of building new plants had dropped, possibly due to designs that emphasize economies of scale.

Suggested Citation

  • Shapouri, Hosein & Gallagher, Paul, 2005. "USDA's 2002 Ethanol Cost-of-Production Survey," Agricultural Economic Reports 308482, United States Department of Agriculture, Economic Research Service.
  • Handle: RePEc:ags:uerser:308482
    DOI: 10.22004/ag.econ.308482
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    References listed on IDEAS

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    1. Gallagher, Paul W. & Brubaker, Heather & Shapouri, Hosein, 2005. "Plant size: Capital cost relationships in the dry mill ethanol industry," ISU General Staff Papers 200506010700001442, Iowa State University, Department of Economics.
    2. Gallagher, Paul W. & Brubaker, Heather & Shapouri, Hosein, 2005. "Plant Size: Capital Cost Relationships in the Dry Mill Ethanol Industry," Staff General Research Papers Archive 12306, Iowa State University, Department of Economics.
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    Cited by:

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    2. Ferris, John N. & Joshi, Satish V., 2007. "Agriculture as a source of fuel prospects and impacts, 2007 to 2017," Biofuels, Food and Feed Tradeoffs Conference, April 12-13, 2007, St, Louis, Missouri 48771, Farm Foundation.
    3. Stephen P. Holland & Jonathan E. Hughes & Christopher R. Knittel & Nathan C. Parker, 2013. "Unintended Consequences of Transportation Carbon Policies: Land-Use, Emissions, and Innovation," NBER Working Papers 19636, National Bureau of Economic Research, Inc.
    4. Pohit, Sanjib & Biswas, Pradip Kumar & Kumar, Rajesh & Jha, Jaya, 2009. "International experiences of ethanol as transport fuel: Policy implications for India," Energy Policy, Elsevier, vol. 37(11), pages 4540-4548, November.
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    6. Jenkins, Timothy L. & Sutherland, John W., 2014. "A cost model for forest-based biofuel production and its application to optimal facility size determination," Forest Policy and Economics, Elsevier, vol. 38(C), pages 32-39.
    7. Kocoloski, Matt & Michael Griffin, W. & Scott Matthews, H., 2011. "Impacts of facility size and location decisions on ethanol production cost," Energy Policy, Elsevier, vol. 39(1), pages 47-56, January.
    8. Timilsina, Govinda R. & Dulal, Hari B., 2008. "Fiscal policy instruments for reducing congestion and atmospheric emissions in the transport sector : a review," Policy Research Working Paper Series 4652, The World Bank.

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