Ethanol Trade Missions to Expand Markets

Representatives of the U.S. Grains Council (USGC), Renewable Fuels Association (RFA), and Growth Energy were in Tokyo this week for an industry market assessment of the potential to export U.S. ethanol to Japan.

growth-exports“The United States exported 900 million gallons of ethanol in 2014, supporting both U.S. farmers and the ethanol industry. We know that, going forward, ethanol exports have the potential to grow and become equally beneficial for our customers overseas,” said USGC president and CEO Tom Sleight. “USGC, Growth and RFA are committed to launching initiatives in 2015 and 2016 to build demand for U.S. ethanol and address barriers to ongoing imports.”

Over the next two years, the government of Japan will be undertaking a full review of its national energy policies, including biofuels, potentially opening up opportunities for additional ethanol exports there.

“The team came away with a much greater understanding of the current Japanese requirements and market conditions pertaining to ethanol and began the implementation of a strategy to help ensure that U.S. ethanol receives fair market access under the future energy policy that will be adopted when the current policy expires in 2017,” said Jim Miller, chief economist and vice president of Growth Energy.

“The team will continue examining the requirements of the Japanese sustainability standards, looking for ways to overcome infrastructure concerns, and compiling data responding to some of the misinformation government officials still hold regarding renewable fuels,” added RFA’s director of regulatory affairs, Kelly Davis.

Last week, the organizations were part of a mission with USDA’s Foreign Agriculture Service in Mexico to explore potential in that market. One mission member, Greg Krissek, CEO of Kansas Corn, reflected on the trip in this video from the USGC.


DDGS Exports to China Returning to Normal

Exports of U.S. distillers dried grains with solubles (DDGS) are starting to return to normal levels, according to the latest numbers for March.

Patriot Renewable Fuels DDGsThe Renewable Fuels Association reports that exports of the animal feed ethanol co-product rose in March for the fourth consecutive month, at 923,515 metric tons (mt), up 15% from February, with half of those shipments going to China. Exports of DDGS to China have been increasing this year after falling off last year due to a biotech trait issue. If normal shipments to China resume on an ongoing basis, 2015 theoretically could see total exports reach the 11 million mt mark. Mexico, Canada, Vietnam, and Thailand account for most of the remaining global market.

U.S. exports of ethanol in March were down slightly from February at 83.8 million gallons (mg), but that still represents the third-highest monthly volume in the last 12 months. Brazil and Canada accounted for half of total U.S. ethanol exports in March, followed by Oman and South Korea. The Netherlands, Tunisia and Nigeria were other key destinations in March.

U.S. Ethanol Exports Rebound in 2014

usda-fasUSDA’s Foreign Agriculture Service reports that exports of U.S. ethanol exports rebounded last year after two years of declines. It was the second highest level of ethanol exports in history, making the United States the largest exporter of ethanol in the world, surpassing Brazil for the second time.

Value and volume of ethanol exports were both up approximately 35 percent from 2013, although still below the record set in 2011. At nearly 3.2 billion liters (836 million gallons), U.S. ethanol exports were worth more than $2 billion dollars. Six percent of ethanol produced in the United States was exported last year, shipped to a more diverse range of markets. Exports to Canada accounted for 40% of the total and while exports to Brazil and Europe dropped, dramatic increases were seen in markets such as the Philippines, South Korea, and the United Arab Emirates.

On the other side, U.S. ethanol imports (including both fuel and non-fuel ethanol) dropped by more than half in 2014, to less than 900 million liters, the lowest level since 2010. At the same time, domestic ethanol production jumped nearly eight percent in 2014, reaching a record 54 billion liters (14.3 billion gallons).

Read the entire FAS report here.

RFA Reports February Ethanol Export Record

The Renewable Fuels Association reports that U.S. ethanol exports reached a new record in February, based on an analysis of the latest government data.

RFANewlogoAccording to RFA Research Analyst Ann Lewis, U.S. exports of denatured and undenatured ethanol in February totaled 85.2 million gallons, up 24% from January, the highest February export volume on record. Year-to-date exports at 153.9 million gallons are in line with exports during the same period last year.

The biggest customer for U.S. ethanol remains Brazil, which received about one quarter (28%) of total U.S. ethanol exports in February, followed by India (20%), Canada (17%), and the United Arab Emirates (12%). The Philippines, South Korea, the Netherlands and Peru were other key destinations in February.

In addition, exports of the ethanol co-product distillers dried grains with solubles (DDGS) rose 13% to the highest monthly level in 5 months, as the Chinese market continues to recover. “However, exports to China remain at about half the level enjoyed prior to the market collapse,” said Lewis.

Recovery of China DDGS Market Continues

Patriot Renewable Fuels DDGsEthanol exports from the United States dropped in January and while distillers grains (DDGS) exports were also lower compared to December, the Chinese market for DDGS is showing recovery.

According to Renewable Fuels Association (RFA) vice president Geoff Cooper, U.S. ethanol producers exported 68.7 million gallons of ethanol in January, down 9% from December 2014 and the lowest since September 2014. However, “imports barely registered in January, with only 28,670 gallons coming in from Canada.”

On the DDGS side, exports totaled 708,861 metric tons in January, down 3% from December and still down 22% compared to a year ago. But the good news is that China was the top market for DDGS exports, receiving 24% of the total. Recovery of the Chinese market continues, as January exports to China were 35% above December levels and up dramatically from near zero in November.

Ethanol Conference Going Global Panel

nec15-global-panelThe theme of the 20th National Ethanol Conference was “Going Global,” and the title panel featured five international experts to discuss building ethanol demand in new markets.

Moderated by Renewable Fuels Association (RFA) general counsel Ed Hubbard, the panel included Pedro Paranhos of Eco-Energy; Lakeview Energy CEO Jim Galvin; Henrique Pacini of United Nations Conference on Trade and Development (UNCTAD); Mike Dwyer with the USDA’s Foreign Agricultural Service; and Robert Wright with ePure.

Hubbard started off the conversation, pointing out that while the U.S. ethanol industry hit record-breaking levels of ethanol exports to the world – 836 million gallons in 2014 – there’s still room for growth.

“As long as U.S. made ethanol provides a valuable, cheaper and cleaner alternative to petroleum-based gasoline, it will continue to be sought all over the globe. This panel’s goal is to help you identify some opportunities, new and expanded, to address some of the challenges we face as we move forward,” Hubbard said.

Paranhos echoed those sentiments, as he broke down how Brazil has seen its overall ethanol market grow over the last 10 years but has plateaued in the last few. Part of that is some of the same issues U.S. ethanol producers are facing: economics and regulatory, in America’s case, the blend wall. The panel talked about how export markets are helped the most by mandates, which help fuel growth of ethanol. Presenters pointed out that producers need to consider sustainability and environmental factors to meet certain countries’ and regions’ requirements to get into those markets, which also, in turn, return better profits for ethanol plants.

Dwyer told those attending that ethanol has made tremendous global gains over the past few years – impressive when you consider the green fuel had to overcome the “food-versus-fuel” debate and a 54-cent-per-gallon tax on ethanol exports.

“In 2008, when I took over this job, if I had told you that the U.S. would become the world’s largest exporter of ethanol, you would have thought I was drinking that ethanol,” he said, pointing out how while gasoline consumption has dropped in the U.S., it’s growing worldwide, making American ethanol competitive on the global market. “A lot has happened in five years.”

The panel members said, even when you consider where ethanol has been and the obstacles ahead, there still is great potential for growth worldwide.

Listen to the panel’s complete remarks here: NEC 15 Going Global Panel

2015 National Ethanol Conference Photo Album

Former USTR Praises Ethanol for Going Global

nec15-kirkFormer U.S. Trade Representative Ron Kirk was the keynote speaker at the Renewable Fuels Association (RFA) National Ethanol Conference this week where the theme was “Going Global” with an emphasis on exports.

“I want to thank you for your very strong and vocal support for a very smart trade policy for our country over the years,” said Kirk, who served under President Obama in his first term. “You understand the importance of going global.”

Kirk lamented that too many Americans have “gone sour” on international trade, citing a poll that found twice as many Americans said they believe in the existence of UFOs than believed international trade was good for America. “We have got to go out and tell the story of the real benefits of trade,” he said.

Listen to Kirk’s remarks here: Former USTR Ron Kirk at NEC 15

2015 National Ethanol Conference Photo Album

USGC Helped Move DDGS Exports in 2014

usgc-winter-grayThe U.S. Grains Council (USGC) held its winter meeting last week in Costa Rica where more than 250 delegates met to take a look back at last year and assess export opportunities.

Chairman Ron Gray says one of big issues of 2014 was with the ethanol co-product distillers grains (DDGS) and China. “At the end of the year, our exports were one of the highest years for DDGS on record,” said Gray. “The Grains Council was instrumental in mitigating that process so that trade can continue.”

Gray, who is a farmer from Illinois, believes it’s important for producers to be involved in trade policy. “I think combines would be easier to fix than trade policy,” he said. “We try to address the next problem so we can keep trade moving.”

Gray says U.S. sorghum picked up some exports to China last year to pick up the slack caused by the biotech trait issue with corn, which allowed them to remain active in the market, but ultimately it’s the growing demand for corn that is benefiting farmers back home.

RFA: Ethanol Exports Hit Near-Record Levels in 2014

ethanolexports2014Exports of American ethanol hit near-record levels in 2014. This news release from the Renewable Fuels Association (RFA) says U.S. producers sent 836 million gallons of ethanol worth $2.1 billion to international markets. The information is in the RFA’s new publication, “2014 U.S. Ethanol Exports and Imports: Statistical Summary.”

The report finds that U.S. ethanol has made its way to all inhabited continents of the world, reaching more than 50 countries. The top five countries importing U.S. ethanol last year included Canada, Brazil, the United Arab Emirates, the Philippines, and India. Meanwhile, exports to the European Union remain down due to a punitive trade tariff it chooses to impose on U.S. produced ethanol.

Bob Dinneen, president and CEO of the Renewable Fuels Association, noted, “Last year U.S. ethanol producers produced a whopping 14.3 billion gallons of ethanol and nearly 6 percent was exported globally. We are working diligently to increase demand for this product abroad. It has been rewarding to see countries all over the world embrace the U.S. produced, high-octane fuel, which has also been the lowest-cost liquid transportation fuel found anywhere in the world.”

Dinneen continued, “U.S. ethanol is now exported to 51 countries across the globe, including regions that once seemed far-fetched as renewable fuel destinations such as the Middle East and North Africa. But, we will not stop here. We will keep working with others in the industry and the U.S. government to keep exploring new regions that would benefit from U.S. ethanol. Last year, RFA participated in trade missions to Panama, China, Peru, Japan, and South Korea and we will keep at it until all countries understand the value of U.S produced ethanol.”

The report also shows ethanol imports into the U.S. are down, reaching the second-lowest levels.

China Approves Imports of Biotech Corn

syngentaSyngenta announced today that it has received approval for the Agrisure Viptera® trait (event MIR162) from China’s regulatory authorities, formally granting import approval. The approval covers corn grain and processing byproducts, such as dried distillers grains (DDGs), for food and feed use.

The Agrisure Viptera® trait is a key component of Syngenta’s insect control solutions, offering growers protection against the broadest spectrum of above-ground corn pests and enabling significant crop yield gains. Agrisure Viptera® has been approved for cultivation in the USA since 2010 and has also been approved for cultivation in Argentina, Brazil, Canada, Colombia, Paraguay and Uruguay.

Syngenta originally submitted the import approval dossier to the Chinese authorities in March 2010. In addition to China, Agrisure Viptera® has been approved for import into Australia/New Zealand, Belarus, the European Union, Indonesia, Japan, Kazakhstan, Korea, Mexico, Philippines, Russia, South Africa, Taiwan and Vietnam.