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Ethanol exports increasing

The Renewable Fuels Association says U.S. exports of ethanol are booming. According the USDA, the Department of Commerce and the Census Bureau, the U.S. shipped more than 45 million gallons of ethanol in March and for the January through March quarter exports exceeded 83 million gallons. Canada and the Netherlands are the biggest customers but sales were made to a number of countries including Brazil.

So why the switch from being a net-importer to a net-exporter? RFA Vice President of Research, Geoff Cooper says for starters, the U.S. is now the world’s low-cost producer, “Current prices show Iowa ethanol plant-gate prices are 50 cents per gallon cheaper than Brazil. That differential hit a dollar in February.

Cooper says the second reason is market saturation in the United States, with the blend rate capped at 10 percent, the blend wall is at 12.5 to 13.5 billion gallons and we currently have 13.5 billion gallons of annual capacity “with more waiting in the wings.” Cooper adds that as long as domestic ethanol use is restricted by the 10 percent blend cap, “The U.S. ethanol industry will be forced to look to the global marketplace for new demand sources.” He says that means Americans will miss out on a more secure domestic fuel supply.