Category: Ethanol

What You Need To Know About Ethanol Usage And Impact To The Economy In 2016

2016 was undoubtedly one of the best years ever in the history of the U.S. ethanol industry. Driven by unprecedented domestic use and strong export demand, ethanol production reached record heights. On top of that, the EPA announced that the blending requirements in the Renewable Fuel Standard Act would be returned to statutory levels in 2017. Meanwhile, farmers harvested a record corn crop, ensuring ample feedstock supplies. In response to this incredible demand, 200 operating ethanol bio-refineries in 28 states produced a record 15.25 billion gallons of high-octane renewable fuel in 2016, along with roughly 42 million metric tons of high protein animal feed. Low oil prices sparked record gasoline consumption, leading to never-before-seen ethanol use in E10, E15 and E85 blends. As for the impact on the agricultural economy and the overall economy at large, ethanol helped spur vital economic activity and supported high-paying jobs. Indeed, the downturn in the farm economy would have been far worse without the ethanol industry’s stabilizing effects. As you are well aware, net farm income fell to a seven year low in 2016, causing concern across rural America about the state of the ag economy. However, in 2016, the production of a record 15.25 billion gallons of ethanol supported 74,420 direct jobs in renewable fuel production and agriculture, as well as 264,756 indirect and induced jobs across all sectors of the economy. Furthermore, the industry added $42 billion to the nation’s Gross Domestic Production in 2016 and paid roughly $9 billion in taxes. The sector’s economic activity and job creation helped raised household income by $23 billion. The extended reach of U.S. ethanol in global markets is also supporting the economy here at home. Growing exports of both ethanol and co-products are helping to not only reduce the U.S. trade deficit, but also support jobs and income in the local economy. (Source: RFA)

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U.S. Ethanol Export Off To A Strong Start in ’17

Exports of U.S. ethanol are off to a strong start for the first quarter of the 2016/17 marketing year and are at their highest levels during that time frame over the past five years. Brazil, Canada and China wre the top customers for U.S. ethanol, respectively. The real story to this strong export pace is due in large part to Brazil who has increased imports of U.S. ethanol substantially to 111.6 million gallons in the first three months of the current marketing year, representing nearly a third of total U.S. ethanol exports, the second highest volume of U.S. ethanol exports to that country over the last decade. The Brazilian government is enforcing mandates that are driving the increases in imports of U.S. ethanol, as Brazilian sugarcane has been diverted to sugar production. To enforce the mandate, Brazil ramped up imports of price competitive U.S. ethanol. The question now becomes how big of a setback we will take with the hike in Chinese ethanol import tariffs?

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