Today in Biofuels Opinion: “It is readily apparent that the market does not believe that our (or the Street’s) estimates for 2009 are achievable.”

From the Renewable Fuels Association: “Given current ethanol production economic… it seems unlikely that 08/09 ethanol use will reach 4.1 billion bushels, as USDA projected in August. Other estimates place corn use for ethanol in 2008/09 closer to 3.8 billion bushels. It is also notable that USDA overestimated corn use for ethanol in the 2007/08 marketing year.”

Pavel Molchanov, energy analyst for Raymond James: “Given the current EPS/EBITDA valuations across much of the alternative energy sector, most notably the solar space, it is readily apparent that the market does not believe that our (or the Street’s) estimates for 2009 are achievable…The bulk of our alt energy universe still trades comfortably above book value…a sizable minority (five out of 17) now trade below book value – a rare situation historically in this sector. Not surprisingly, four of these five companies (Pacific, BioFuel, VeraSun, and Aventine) are ethanol producers…the market is implying that existing ethanol production capacity could be bought below replacement cost.”

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