Ethanol production in July shrank 2.7% to a 17-month low of 1.055 billion gallons, while biodiesel production declined 8.5% to a three-month low of 108.2 million gallons, according to the latest monthly data released Thursday by the US Environmental Protection Agency through its EPA Moderated Tracking System website.
This was the second consecutive month of losses for monthly ethanol production, indicated in the renewable fuel (D6) category by the EPA.
Monthly ethanol production had not been this low since February 2011, when it was at 1.051 billion gallons.
The lower monthly ethanol production figure was due to ethanol plant shutdowns and reduced operating rates that were the result of slim ethanol production margins in the wake of a drought in the Midwest that decimated current feedstock corn crop yields, sources said.
Monthly biodiesel production, indicated in the biomass-based diesel (D4) category by the EPA, was at its lowest level since April, when it was at 98.677 million gallons.
Like ethanol, biodiesel production was lower as production margins have also been slim, sources said, as the drought in the Midwest also kept feedstock soybean prices high as the dryness and heat reduced yields for the current soybean crop, although not to the extent of the corn crop.
Advanced biofuel (D5) production -- mostly comprised of ethanol derived from feedstock sugarcane -- in July took a different turn than the other biofuels as it increased for the fourth straight month, gaining 13.9 million gallons, or 36.7%, to a high for 2012 of 51.6 million gallons.
The last time monthly advanced biofuel production was this high was in December 2011, when it was at 56.1 million gallons.
