The Role of Information Technology in the Fuel Ethanol Industry

This USDA-sponsored study uses panels of ethanol industry experts and follow up interviews with plant owners and managers to examine how information technology has impacted the structure, organization, and operations of the fuel ethanol industry. The study examined the following questions regarding the future of the ethanol industry: (1) Does the present ethanol industry represent a stable structure or a transitional step toward an inevitable concentration of ownership into the hands of a few large processing firms? (2) Have contemporary information technologies fundamentally changed the information flows, scale of operations, access to markets, conditions of vertical and horizontal coordination, sources of finance, and the competitive landscape for the medium-sized, independent processing firm? (3) To what degree have cost savings associated with better access to information and financing offset the cost savings traditionally associated with horizontal and vertical integration in processing industries? (4) What steps do medium-sized ethanol production entities need to take to continue to survive in this new information-based market environment?