Ethanol profitability has done a complete 180 since the height of the COVID meltdown in 2020. At that time, gasoline and ethanol consumption dropped by 50% and forced the same amount of ethanol plants offline. However, the ethanol industry had some near-record margins late in 2021, and they continue a strong start to 2022.

Ethanol prices and margins are off their record highs set in November, but are still very profitable.

Doug Berven: Margins are really good. We haven't had margins like this for a number of years so it's really nice.

DTN Market analyst Tregg Cronin says they peaked at well over $1.00 per gallon in the fall, but are still positive.

Tregg Cronin: We've been grinding corn at an incredible pace, really supporting that ethanol demand for corn and again that's come off a little bit probably slows a little bit more as we get into the winter but a real bright spot after, you know, the kind of year we saw in 2020.

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That's kept corn basis and cash prices abnormally firm since harvest and meant some nice dividend checks for farmer investors.

Tom Haag: They are doing very well. You know the two operations that I belong to the ethanol plants are saying we never would have guessed this but it's another perfect storm.

Demand outstripped production after the ethanol pipeline was depleted during COVID. And plants have produced more than a million barrels per day for multiple weeks catching up.

Berven: Part of it is the tight supply. We're at about 100-percent pre-COVID demand right now. People are back and traveling.

Plus higher energy prices support more ethanol use.

Haag: Gasoline is more expensive so they're using more ethanol for that to put into the gas.

Cronin says how long this trend will continue is difficult to predict.

Cronin: We've just got to keep watching ethanol swaps and ethanol prices and as long as they can kind of maintain where they're at with corn prices we're gonna keep grinding corn.

Berven hopes it lasts long enough, though, for ethanol plants to heal from the financial meltdown during COVID and rebuild.

Berven: We hope that that continues because it's important for us to have a margin because we're investing in the future.