Ethanol industry forcing consolidation in order to squeeze out inefficient producers

In Illinois, major ethanol producers are looking to boost production in order to squeeze out more inefficient producers, causing consolidation in the industry that is facing challenges in light of an uncertain policy framework and international demand. This year, producers have installed more capacity than during the past six years, allowing efficient producers to take advantage of economy of scale without much increase in fixed costs. As a result, this year has seen record highs of more than a million barrels per day on average.