Grains Council CEO at #ACE16DC

The American Coalition for Ethanol (ACE) is a new member of the U.S. Grains Council, recognizing the important role that organization plays in the promoting exports of both ethanol and the livestock feed co-product DDGS.

ace16dc-sleight“We have a unified (ethanol) industry effort working together to build exports,” said USGC president and CEO Tom Sleight who visited with members of ACE in Washington DC last week for their annual legislative fly-in. “For 15, 20 years we’ve been doing DDGS and now for about three years we’ve been looking at ethanol and the effort is going farther and faster then I thought it would, again because of the strong cooperation we’re getting from the full ethanol industry.”

Sleight says China, Japan, Mexico and India are top priorities for U.S. ethanol exports. Secondary markets include Canada, Philippines, Colombia, and Peru.

In this interview, Sleight also discusses the U.S. DDGS market outlook and upcoming Export Exchange this year to bring buyers and sellers of DDGS together. Interview with Tom Sleight, USGC

ACE 2016 DC Fly-in Photo Album

#ACE16DC Gets Update on China DDGs Investigation

Back in January, China’s Ministry of Commerce (MOFCOM) initiated an investigation into anti-dumping and countervailing duties on imports of U.S. produced distillers dried grains with solubles (DDGS). The U.S. Grains Council has been on top of the situation from the start and provided an update for members of the American Coalition for Ethanol (ACE) meeting in Washington DC this week.

ace16dc-erbUSGC Director of Industry Relations Lyndsey Erb says the issue is important because China is such a huge market for the ethanol co-product used as animal feed. “China had been the largest importer of U.S. DDGS, taking 56% of exportable supplies last year,” said Erb. USGC has been coordinating the response from the U.S. ethanol industry to provide the information needed to help address the concerns and get China back in the market.

“We’re still very much in the beginning stages,” Erb says. “Ultimately the case has to wrap up between a year and a year and a half after the initiation so we still have a long road ahead of us in this case but such a large percentage of the U.S. industry is joining the Grains Council to fight that we are optimistic we can put together a good defense.”

Erb explains more in this interview: Interview with Lyndsey Erb, USGC

ACE 2016 DC Fly-in Photo Album

Latest #Ethanol Trade Statistics

The latest ethanol and distillers dried grains with solubles (DDGS) export numbers show Brazil is importing more U.S. ethanol as exports of DDGS continue to decline.

rfa-annAccording to Renewable Fuels Association (RFA) analyst Ann Lewis, exports of U.S. ethanol totaled 67.0 million gallons in February, down 23% from January’s 14-month high. “Brazil overtook recent leaders Canada and China as the top destination for U.S. product in February,” Lewis reports. Brazil imported over 22 million gallons of U.S. ethanol in February while exports to Canada were 14.5 mg, up 6% over January volumes and exports to China totaled 8.9 mg, down from 29.4 mg in January. On the import side, only marginal volumes of foreign-produced fuel ethanol have entered the United States so far this year.

Exports of DDGS continued to fall in February, to 785,383 metric tons with China remaining the top destination. Exports of U.S. DDGS to Mexico were down 26%. Other top customers were Vietnam, Thailand, Canada, and South Korea.

Ethanol Report on Trade Mission to Peru

ethanol-report-adThe Renewable Fuels Association (RFA) was part of a recent trade mission to Peru led by Agriculture Secretary Tom Vilsack which included discussions about increasing cooperation with that country when it comes to ethanol production and exports. The March 13-15 trip went to Lima and the Piura region, where cane-based ethanol is produced, and featured meetings with ministry of energy officials and a biofuels roundtable with ethanol producers and fuel distributors.

RFA General Counsel Ed Hubbard was among nearly 40 industry and government representatives on the trip. In this edition of the Ethanol Report, Hubbard talks about the mission and opportunities with Peru to expand ethanol

Listen to it here: Ethanol Report on Trade Mission to Peru

House Members Urge Reduction in #Ethanol Tariffs

ttipA bipartisan group of lawmakers sent a letter to U.S. Trade Ambassador Michael Froman this week urging him to examine opportunities to reduce any tariffs on U.S. produced energy, including ethanol, during the Transatlantic Trade and Investment Partnership (T-Tip) negotiations.

“The U.S. ethanol industry has been unfairly targeted by the EU for increased duties (on ethanol) which have subsequently eliminated U.S. share in the European market,” reads the letter from nine members of Congress. “Currently Europe cannot adequately produce enough ethanol for their own market without importing ethanol from foreign sources, such as the U.S.”

“As T-TIP negotiations progress toward completion,” they continued, “we are confident you can leverage access to all domestic energy sources, such as U.S. natural gas, crude, and ethanol in order to achieve a favorable outcome for these industries and the reduction or elimination of trade obstacles to market access in Europe.”

The European Commission imposed a 9.6 percent duty on U.S. ethanol over three years ago in response to an anti-dumping complaint lodged by European ethanol trade group ePURE. In May 2013, the Renewable Fuels Association (RFA) and Growth Energy filed a complaint with the General Court in Luxembourg which is still being litigated challenging the Commission’s decision.

“The duties imposed were unjustified and blatantly protectionist,” says RFA CEO Bob Dinneen. “Sadly, the real losers in this are European consumers that have to pay more for motor fuel because the lowest-cost liquid fuel in the world — U.S. ethanol — has been targeted by their protectionist policy. Since Europe cannot produce sufficient domestic ethanol supply, and must import the fuel from foreign sources, including the U.S., it is time to see the duties removed.”

RFA, Growth Energy Join USGC

US Grains Council logoThe U.S. Grains Council’s (USGC) membership is expanding. This month the Renewable Fuels Association (RFA) and Growth Energy became official members. Southwest Iowa Renewable Energy (SIRE) and Al-Corn Clean Fuel also joined this month. USGC says their newest members, especially the ethanol trade organizations, will benefit them in multiple ways as they work together to increase global ethanol exports. Both groups will also have seats on USGC’s ethanol Advisory Team.

rfalogo1“We are proud to have RFA’s and Growth’s full support promoting ethanol overseas,” said USGC Chief Economist Mike Dwyer. “While they have sat on an advisory committee before, now they will really have the chance to engage as members. These organizations specialize in ethanol and offer input and context that will take our A-Team activities and programs to a new level.”

The 2014/2015 marketing year saw the second largest quantity of U.S ethanol shipped overseas. The organizations are using this as foundation for promoting U.S. ethanol as a clean-burning source of fuel to buyers and end-users around the globe. Lase year, this work was done through ongoing assessments of potential markets; bringing three buyers teams to visit the United States; bringing two groups of U.S. ethanol industry representatives overseas; and a series of workshops focusing on the environmental and economic benefits of ethanol use in China.

This year, this Council’s work will focus on the Asia-Pacific region, particularly Japan, Mexico, India and China as priority markets, with additional opportunities in Peru, the Philippines and other countries that are increasingly receptive to the benefits of blending ethanol into their fuel supplies.

growth-energy-logo1“With RFA’s and Growth’s growing engagement in these programs, the steering committee is showing their commitment to our work abroad,” Dwyer said. “Developing new markets for fuel ethanol exports offers new opportunity for U.S. corn and sorghum producers and offers us new ways to partner with customers looking to reduce their fuel costs and their environmental impacts.”

China Leads in U.S. Ethanol Exports

According to Ann Lewis, research analyst with the Renewable Fuels Association (RFA), U.S. ethanol exports increased by 7 percent over December 2015 kicking off 2016 with a strong start. Using U.S. data, the increase marked a 14-month high with the industry shipping 87.1 million gallons (mg), with China taking the lead with a third of the market at 29.4 mg—rivaling the record of 32.6 mg to China last October.

During the same time frame, Canada received just 13.7 mg—the lowest volume of exports north of the border since October 2010. The United Arab Emirates (10.9 mg) and South Korea (10.4 mg) were other top markets in January. Brazil brought in a fairly sizable volume (6.6 mg) considering its recent absenteeism from the U.S. export picture. January’s robust exports equate to 1.05 billion gallons on an annualized basis.

Monthly US Exports Jan 2016Denatured fuel ethanol exports saw a 29 percent month-on-month increase to 65.0 mg in January. China grabbed 29.4 mg (45%) of that market, with Canada (12.2 mg, or 19%), the UAE (8.1 mg, or 12%) and South Korea (5.9 mg, or 9%). Lewis reports that January exports of undenatured ethanol for fuel use fell 29 percent from December to 20.2 mg. Brazil (6.6 mg) and South Korea (4.5 mg) received 55% of undenatured fuel exports, while the Philippines (2.9 mg), the UAE (2.8 mg), Mexico (2.2 mg) and Peru (1.1 mg) rounded out the list. Sales of undenatured ethanol for non-fuel, non-beverage use crashed to the lowest level since February 2013, dipping 64 percent to 212,369 gallons. Similarly, denatured non-fuel use ethanol exports slumped 21 percent to 1.7 mg—the lowest volume in over a year. The U.S. kept exports of non-fuel product close to home with 78 percent of total shipping to Canada and 9 percent to Mexico.

The U.S. imported just a splash of ethanol for fuel use in January. Inbound shipments came from Canada (500 gallons) and the Netherlands (165 gallons). Given the paltry import figure, January U.S. net exports of 87.1 mg were the highest since the record month of December 2011.

January exports of U.S. distillers dried grains with solubles (DDGs) fell 19 percent from January to 800,580 metric tons (mt). DDGS exports to China tallied at 218,961 mt, representing a 3 percent decrease over December volumes but an increase in market share (27% of total U.S. exports vs. 23% in December). On a side note, these volumes were recorded despite the country opening an anti-dumping case against the U.S. for DDGs. Other export markets included Mexico at 195,669 mt, Ireland at 48,456 mt, Canada at 47,617 mt, Thailand at 46,838, Vietnam at 45,744 mt and South Korea at 45,046 mt.

Admin Takes Swift Action on China Antidumping Case

The U.S. ethanol industry recently called on the Obama administration to take quick action against China who has opened an antidumping case on U.S. exports of dried distillers grains (DDGs). In the letter, the groups asked for swift action to “mount an aggressive defense of our access to the Chinese livestock feed market.”

This week the office of the United States Trade Representative (USTR) as well as the Department of Commerce contacted the appropriate Chinese officials, expressing their concern over the process and sampling methodology utilized in selecting U.S. companies for participation in the antidumping and countervailing duty cases.

Following the decisive response, Growth Energy and RFA praised the administration for action to defend the U.S. DDG industry.

growth-energy-logo1Tom Buis, co-chair of Growth Energy noted, “I would like to commend President Obama and his administration for taking immediate action to protect the U.S distiller’s grains industry. The simple fact is that there is no reason the People’s Republic of China should file a case like this – it is counterproductive, disrupts trade and produces uncertainty throughout the domestic ethanol industry. Growth Energy and its members are grateful for the position this administration has taken to ensure that unnecessary trade restrictions such as this anti-dumping and countervailing duty case are resolved as quickly as possible.”

rfalogo1“I congratulate and appreciate the administration for getting involved in this crucial issue,” said RFA President and CEO Bob Dinneen. “I am glad both the United States Trade Representative and the Department of Commerce are recognizing the urgent need to address our concerns. I look forward to a quick resolution of these cases and returning to fair trade of the U.S. distillers dried grains industry.”

Growth, RFA Urge U.S. to Action Against China

Back on January 12, 2016, the Ministry of Commerce of the People’s Republic of China (MOFCOM) filed antidumping and countervailing duty cases against the U.S. distiller’s dried grains industry (DDG). This was not the first time the MOFCOM has filed antidumping charges against the U.S.; however, all earlier cases were dropped.

Photo Credit: Renewable Fuels Association (RFA)

Photo Credit: Renewable Fuels Association (RFA)

Yesterday the ethanol industry including Growth Energy and the Renewable Fuels Association (RFA), called upon the U.S. government to take action against China on the current DDGs antidumping case. The groups sent a letter to President Obama calling for action through the Office of the U.S. Trade Representative, Department of Commerce and Department of Agriculture “to challenge both the process and preliminary determinations made by China’s investigating authority through comments to MOFCOM and through the World Trade Organization.”

The letter stated, “The uncertainty and market risk resulting from China’s actions has already triggered substantial financial losses for U.S. distiller’s grains producers. Distiller’s grains prices have plunged more than 25 percent since last summer, while prices for corn and other feedstuffs have been stable or even increased slightly. At a time when both U.S. ethanol producers and farmers are facing serious economic challenges, it is estimated that China’s actions have already resulted in distillers grains losing $30-35/ton in value. This is equivalent to an annualized aggregate loss of $1.2 to $1.6 billion to U.S. ethanol producers, many of whom are small businesses in rural America. Losses would mount further, potentially to $50-60/ton or more, if the anti-dumping and countervailing duty actions ultimately result in a total collapse of distillers grains exports to China, meaning a loss to the U.S. economy of more than $2 billion.”

The letter concluded by asking President Obama to “work closely with the U.S. distiller’s grains industry to mount an aggressive defense of our access to the Chinese livestock feed market throughout China’s antidumping and countervailing duty investigations.”

US Grains Releases New Portal, App

The U.S. Grains Council (USGC) has released a grains conversion calculator app and a U.S. grains-in-all-forms exports portal to help members of the global grain trade access critical information more easily. The U.S. grains-in-all-forms exports portal is an online calculator that converts volumes of exported U.S. commodities including ethanol and dried distillers grains (DDGs) into corn equivalents. This offers a different and holistic view of the amount of feed grains produced by U.S. farmers that are consumed by overseas customers.

screen568x568“We are excited to expand our digital presence to include these products that will be helpful for both domestic and international stakeholders,” said USGC Chairman Alan Tiemann, who farms in Nebraska. “The grains conversion app and the grains-in-all-forms portal are cutting-edge resources that contain information, trends and statistics that will help the global grain trade work and grow.”

The Council’s grains conversion app converts English units to metric units and vice versa for grains and related measures. The app is available to download for free in the appropriate app stores for Apple, Android and Windows platforms. It also includes an option to switch between multiple languages including English, Arabic, Japanese, Mandarin, Spanish, French and Korean.