America is reaching the end of the summer driving season, usually a signal for a fall in gas or petrol prices. For America's nascent ethanol industry, this price fall is being compounded by several other factors.

As this article in the Chicago Tribune makes clear, the woes of the ethanol industry are also being compounded by;

i) Higher corn costs - due to the competition for food or fuel from a limited feedstock
ii) Higher plant construction costs - a 10% increase from $2.20 a gallon, up from about $2 a gallon
iii) Looming oversupply - There are currently 128 ethanol plants in the U.S. Seventy-seven plants are under construction and eight are expanding

We have seen these problems translate into much worse results for bioethanol stocks.

Take VeraSun Energy Corp., America's third-largest ethanol producer by capacity, blaming higher corn costs, the company reported earlier this month that Q2 profit fell 23 percent. And then there's Aventine Renewable Energy Holdings Inc. whose profit fell a massive 49 percent.

Actually, I rather doubt that this will go on and on. Apart from which, falling ethanol prices - which benefit the consumer rather than the producer - has to be a good thing. So keep a close eye on the ethanol price, either once a week through my newsletter (just sign up on the top right-hand corner of this page), or more often here.