The U.S. ethanol industry delivered a very strong second quarter, according to the latest quarterly report issued by CoBank’s Knowledge Exchange on July 14. Ethanol profits and production remain robust despite record gas prices, according to the report.

The ethanol industry experienced few visible signs of demand destruction during the second quarter despite a spike in retail gasoline prices, rising inflation, aggressive Federal Reserve interest rate actions, a significant showdown in the U.S. economy and deteriorating consumer sentiment, according to CoBank.

The report indicates that ethanol production during the second quarter was down slightly when comparted to the first quarter, averaging 15.5 billion gallons on an annualized basis. According to CoBank, second quarter operating margins were at 33 cents per gallon, well above the five-year average of 22 cents per gallon. CoBank said the relatively high margins were driven by a 16 percent increase in fuel ethanol prices, which exceed input costs of corn and natural gas.

U.S. ethanol exports reached a four-year high in April, at 185 million gallons, with sales diversified among several key trading partners. Overall, ethanol exports for the first four months of the year were up 67 percent, according to CoBank. U.S. exports of dried distillers grains (DDGS) were also up during the fourth month period, but at a lower rate of 8 percent. The report also notes that consumer gasoline demand remains stable despite prices that have reached $4.88 per gallon, up from $3.10 per gallon a year ago.

A full copy the CoBank Knowledge Exchange’s latest quarterly report can be downloaded from the company’s website.