Economic analysis of ethanol production in California using traditional and innovative feedstock supplies

In this article, we estimate the costs of using alternative feedstocks to produce ethanol in a 40 million-gal facility in California’s San Joaquin Valley. Feedstocks include corn imported from Midwestern states and locally grown agricultural products such as corn, grapes, raisins, oranges, and other tree fruits. The estimated feedstock costs per gallon of ethanol include $0.92 for Midwestern corn, $1.21 for locally grown corn, $6.79 for grapes, $3.36 for raisins, $3.92 for citrus, and $1.42 for other tree fruit. Adjusting for coproduct values lowers the estimated net feedstock costs to $0.67/gal of ethanol for Midwestern corn, $0.96 for locally grown corn, $6.53 for grapes, and $3.30 for raisins. We also examine the potential increases in net revenue to raisin producers, made possible by having an alternative outlet available for selling surplus raisins.