Ethanol production for April remains fairly steady with the Energy Information Administration (EIA) reporting daily ethanol production falling slightly to 898,000 barrels per day (b/d) or 37.7 million gallons per day for the week ending April 8, 2011. The four-week average for ethanol production at the time of the report was 904,000 b/d, with the annualized rate equating to 13.85 billion gallons. Stocks of ethanol have also remained virtually steady ending at 20.5 million barrels.
As part of the ethanol production process, several co-products are produced including distillers grains. For the week ending April 8, ethanol producers consumed 13.62 million bushels of corn daily to produce ethanol and 101,346 metric tons of livestock feed of which 89,484 metric tons were distillers grains (DDGs). Ethanol producers were also supplying 3.88 million pounds of corn oil which can be utilized in the feed or biodiesel markets.
The U.S. ethanol exports and DDG market report was also released and Renewable Fuel Association (RFA) VP of Research and Analysis, Geoff Cooper analyzed the information.
U.S. ethanol exports totaled 59.7 million gallons in February, up 4 percent from January. Exports of undenatured (non-beverage) ethanol increased to 21.8 million gallons in February, nearly double the amount shipped in January. Meanwhile denatured ethanol exports were 37.9 million gallons, down from 45.4 million in January. Because this ethanol is not blended with gasoline prior to exportation, it does not qualify for the Volumetric Ethanol Excise Tax Credit (VEETC), also known as the blender’s credit. Through the first two months of the year, ethanol exports stand at 116.9 million gallons. If the current pace is maintained all year, exports for 2011 could total more than 700 million gallons (compared to 400 million in 2010).
The number one exporter of U.S. denatured ethanol was Canada at nearly 15 million gallons followed by the United Arab Emirates (UAE), United Kingdom, and Brazil. In regards to undenatured ethanol, more than 11 million gallons went to the Netherlands in February. The second- and third-leading destinations for undenatured ethanol were the OPEC nations of UAE and Nigeria.
Distillers grains exports for February totaled 619,744 metric tons, down 13 percent compared to January, but slightly above February 2010 totals. China was the leading importer of U.S. DDGs with 110,976 metric tons. Exports to China were down 14 percent from January and less than half of the amount shipped as recently as October 2010. According to Cooper, erosion of exports to China is likely the result of the nation’s ongoing anti-dumping investigation against U.S. DDGs. Mexico was the second-leading destination, receiving 102,450 metric tons in February. This was less than half of the 223,000 metric tons shipped to Mexico in January. Canada, Spain and Vietnam rounded out the top five.