Economics of Sugar-Based Ethanol Production and Related Policy Issues

Abstract

The feasibility of integrating ethanol production into an existing sugar mill was analyzed by a stochastic spreadsheet model. As the price of corn continues to rise, ethanol producers will eventually need to look at other feedstock alternatives. Sugarcane has been proven to work well in the production of ethanol in Brazil. The results indicated existing U.S. sugar mills could economically switch to ethanol production. As imports into the United States threaten to undermine the U.S. sugar program, sugarcane producers have a viable alternative. At the very least, the alternative exists to diversify their income streams with ethanol production.