Inventories consisted primarily of bulk ethanol, specialty alcohols, corn, essential ingredients and unleaded fuel, and are valued at the lower of cost or net realizable value, with cost determined on a first-in, first-out basis. Inventory is net of valuation adjustments of $1,800,000 and $1,033,000 as of June 30, 2021 and December 31, 2020, respectively. Inventory balances consisted of the following (in thousands):