December futures prices for corn have declined to $7.40 a bushel from a high of $8.38 on Aug. 21. “As we have seen a pullback from the 21st of August, including the significant price moves we’ve seen in the past few days, we’ve dropped nearly a dollar per bushel in the December contract,” Rick Kment, a Telvent DTN biofuels analyst told Ethanol Producer Magazine on Sept. 18.

Futures prices for corn were at $5.10 on June 13 and climbed steadily throughout July and August. July 30 was the first time prices hit above $8 for the December contract. During that time, the ethanol industry cut back on production rates and some producers even idled temporarily. “Now we are seeing less focus on poorer margins and plant cut backs, because of the lower corn prices,” he said.

Distillers grains cash prices, which track corn prices, are down too. According to weekly average prices collected by DTN, distillers grains prices spiked the week of Aug. 10, at a weekly average of $299 a ton. The latest weekly average is down $13 to $286 a ton. “We’ve kind of backed away from that early August high,” he said.

Looking back, distillers grains cash prices were at a weekly average of $213 in the first week of June and, like corn prices, steadily increased in July and August. The week of Sept. 14 represented the first significant drop, from $292 on Sept. 7 to $286 on Sept. 14.

The decline in price of distillers is due to increasing supply and decreased demand, said Gerald Shurson, a swine nutrition and management professor at the University of Minnesota. More ethanol plants are producing at higher rates, however, demand is down because distillers grains is priced at about 103 to 104 percent the price of corn. “Although DDGS is a good partial replacement for corn and soybean meal, its current price relative to corn makes it less attractive than when it is priced at 75 to 80 percent the price of corn,” he said.