The ethanol industry has long been a proving ground for visionaries. But five years ago, could anyone have thought the industry would be where it is today? Apparently yes, and the proof can be found in an article Tom Bryan wrote for the September 2004 issue of Ethanol Producer Magazine.

Titled "5 Years Out" and available at http://www.ethanolproducer.com/article.jsp?article_id=892, the article asked a variety of ethanol industry leaders to predict what would occur in the next five years. Despite one year remaining until that five-year outlook is complete, it's surprising how close to reality the predictions have become.

Let's take a look at a few of the predictions. First, several experts predicted increased volatility in the commodity markets as supply and demand balances become more tentative. While predicting commodity market volatility is like predicting the sun will rise tomorrow, it's readily apparent how volatile it's become. For example, oil prices were in the $40 per barrel range in September 2004. After spiking to nearly $150 they have moderated slightly to less than $100. I'd say that pretty well defines volatility.

Next, several experts predicted that ethanol prices would become more transparent due to the emergence of ethanol futures exchange and cash market contracts. While the volume may not be as large as expected, the Chicago Board of Trade's ethanol contracts have helped accomplish this goal.

Aventine's Jim Redding predicted that unit trains to major markets will become the norm, since ethanol use will grow around the coastal areas and population centers. "In essence, the necessary infrastructure to make ethanol like other efficient commodity markets will exist five years from now," he said.

This may be the most accurate prediction as unit trains are carrying ethanol from the Corn Belt to the far reaches of the East and West Coasts. Major oil blenders are instituting infrastructure in the southeast United States.

Of course, cellulosic ethanol was a common prediction, and one that continues to be just on the industry's horizon. Its delay not only shows just how difficult it is to predict the future, but how spot-on some of the industry's experts were in 2004. "Five years is actually quite a long time to predict how this industry may change or evolve," said ICM President Dave Vander Griend said in 2004. "If you would have asked me that same question five years ago, I would not have predicted that we would be at the stage we are at today."