Ethanol Prices Face Downward Pressure Amidst Ample Supply and Low Gasoline Costs

Feedstock Abundance

The US has seen record dry natural gas and corn production in 2025, which has drastically lowered the floor for ethanol production costs. However, this abundance has led to a build-up in inventory that producers are struggling to clear, despite healthy export demand from Latin America and Asia.

Blending Mandates and Margins

While federal blending mandates provide a floor for consumption, the low price of conventional gasoline is squeezing discretionary blending margins. Producers are hoping for a recovery in the energy complex in early 2026 to help restore ethanol's price competitiveness.