In the News
Jun 12, 2020
Five railcars of U.S. gasoline pre-blended at an E10 rate arrived in Guadalajara in May 2020 – 14,500 gallons of ethanol (5,300 bushels in corn equivalent) – a direct success of the U.S. Grains Council’s collaboration with the Mexican Association of Service Station Providers (AMPES) to demonstrate the economic and environmental benefits of increased ethanol use. The delivery exemplifies the importance of continued engagement in the Mexican market, including an in-country presence, to realizing increased ethanol use.
“The economic benefits keep proving themselves load-by-load,” said Stephan Wittig, USGC director in Mexico. “Despite the adverse conditions due to COVID-19, ethanol is supporting the Mexican environment, gasoline distributors, fuel retailers and most importantly, the Mexican consumer.”
The Council – together with U.S. ethanol industry partners Growth Energy and the Renewable Fuels Association (RFA) and state corn organizations – are providing information to Mexican stakeholders on the benefits of ethanol use, including savings at the pump, improved air quality and a long-term commitment to the environment.
As part of that education effort, the Council developed a strategic partnership with AMPES to offer educational workshops. This series updated Mexican gasoline station owners on developments in fuel regulations, dispelled myths about ethanol use and encouraged distribution companies to ask for quotes on ethanol and how to incorporate ethanol tanks in their facilities. In 2019, the groups – including the Council, AMPES, Growth Energy, RFA and the American Coalition for Ethanol (ACE) – conducted 11 workshops throughout the country.
Grupo Topete, a family-owned gasoline trader building a fuel terminal in Jalisco near Guadalajara, attended two of these workshops. The Council also connected the company with Petrorack, a fuel retailer in northern Mexico supportive of E10 following USGC programs like the 2019 Global Ethanol Summit.
Taking advantage of the economic benefits and shared support the company learned about during the seminars, Grupo Topete started importing pre-blended E10 gasoline in May 2020 to its already-built rail track to distribute to independent retail stations.
“Despite the steep decrease in gasoline demand in Mexico due to coronavirus restrictions – down 70 percent at the lowest point – ethanol realized competitive advantages in the Mexican market,” Wittig said. “Enough margin was offered to deliver the pre-blended E10 gasoline to retail stations within a four-hour drive of the Grupo Topete terminal in Jalisco.”
While these sales are only a small part of the overall ethanol sales to Mexico, this success demonstrates the effectiveness of the Council’s approach to provide technical education and support within the Mexican fuel industry. Each is a step toward encouraging increased ethanol use through a mix of growing quantities of locally produced ethanol with U.S. ethanol filling in the missing demand.
To accomplish that goal, the Council will continue to help fuel retailers, station equipment installers and local fuel station owners learn more about the advantages of selling ethanol-blended gasoline as Mexico’s transportation fuel sector continues to evolve.
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Jun 10, 2020
U.S. fuel ethanol production increased by more than 9 percent the week ending June 5, while weekly ending stocks of fuel ethanol fell by 3 percent, according to data released by the U.S. Energy Information Administration on June 10.
Ethanol production averaged 837,000 barrels per day the week ending June 5, up from an average of 765,000 barrels per day the previous week. The week ending June 5 marks the sixth consecutive week of growth following sharp declines that began in late March and continued through April due to market impacts caused by the COVID-19 pandemic. Production was down 259,000 barrels per day when compared to the same week of 2019 and down 242,000 barrels per day when compared to the final week of February, before U.S. fuel markets started to be impacted by COVID-19.
Weekly ending stocks fell to 21.802 million barrels the week ending June 5, down from 22.476 million barrels the previous week and the lowest level of weekly ethanol ending stocks reported since the final week of 2019. The week ending June 5 marks the seventh consecutive week of falling ethanol stocks following a record high of 27.689 million barrels set the week ending April 17. Weekly ending stocks for the week ending June 5 were flat when compared to same week of last year.
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DuPont Nutrition & Biosciences
Jun 10, 2020
DuPont Nutrition & Biosciences today announced the launch of SPEZYME® HN, the latest in the SPEZYME® line of alpha amylase enzymes and a new inclusion in business’s suite of XCELIS® Ethanol Solutions.
The SPEZYME® line is known for offering numerous advantages for ethanol producers, including robust liquefaction and significant viscosity reduction across a variety of temperatures and pH levels. For the new SPEZYME® HN blend – which combines an alpha-amylase with a thermostable phytase – that means delivering industry-leading liquefaction for dry grind ethanol plants operating under harsh conditions.
“This is a significant development for the industry right now, particularly following the success of Clean in Place (CIP) solutions that lead to lower cations in the ethanol production process, which has traditionally caused challenges for alpha-amylases,” said Josh Naylor, marketing coordinator, DuPont Biorefineries. “SPEZYME® HN is a unique alpha-amylase blend in that it is designed to perform extremely well in harsh low cation or high temperature liquefaction conditions. This gives plants unprecedented flexibility in how they run their front-end operations.”
SPEZYME® HN generates high dextrose equivalents (DEs) and starch solubility when liquefaction cation concentrations are far below the industry average. In fact, it produces higher DEs and lower slurry viscosity than competitive alpha-amylases at liquefaction temperatures up to 195 degrees Fahrenheit.
To learn more about SPEZYME® HN and other XCELIS® Ethanol Solutions from DuPont, visit www.xcelis.com/spezymehn or https://www.linkedin.com/showcase/xcelis-ethanol-solutions
Jun 8, 2020
A group of 44 members of Congress sent a letter to President Trump on June 8 urging him to deny requests filed with the U.S. EPA by several governors seeking a waiver of 2020 Renewable Fuel Standard blending requirements.
“We write to express our concern regarding recent requests to waive blending requirements under the [RFS],” the representatives wrote. “This pandemic has severely strained the market for biofuels, closing plants and dealing another crippling blow to an industry that is already struggling. We urge you to stand with our farmers and rural economies during this challenging time and deny any request for blanket statewide or nationwide waivers from the 2020 RFS blending requirements under the Clean Air Act.”
In the letter, the members of Congress stress that granting the RFS waiver requests would compound the challenges facing rural America and weaken one of the most successful clean air policies in the U.S. “These waivers directly undermine the RFS and only stand to put more pressure on the ethanol and biodiesel industries, which support over 300,000 high-paying American jobs,” they continued.
The representatives also noted that the effects of COVID-19 combined with the damage caused by the EPA’s abuse of small refinery exemptions (SREs) caused more than 150 biofuel plants to idle or reduce production. “This means that over 50 percent of U.S. ethanol production capacity has ceased operations, resulting in economic uncertainty for our rural economies and the loss of a critical market for corn farmers. At an already turbulent time for ethanol and biodiesel producers, we must take action to support—not undermine—the industry and our farmers,” they continued.
The 44 representatives also called the waiver requests “unjustified,” said that they “run contrary to the EPA's well-established precedents,” and stressed the waiver requests fail to meet necessary legal criteria. The letter stresses that recent oil market volatility is not being caused by the RFS. Rather, that volatility is a result of COVID-19-related factors and high production levels in Russia and Saudi Arabia. In addition, the representatives point out that RFS regulations already account for the drop in fuel demand because blending standards are percentage-based. They also note there is currently an excess supply of renewable identification numbers (RINs) on the market and available to refiners, offering flexibility for RFS compliance.
We stand ready to work with you on ways to deliver on continued investment and support for biofuels,” the members of Congress wrote. “They offer an immediately available and proven path towards decarbonizing the transportation sector, driving economic growth, creating jobs, and improving air quality. We need to make sure that our rural economies are in the best possible position to recover from this crisis and any move to weaken the RFS would only put us further behind.
“Again, we strongly urge you to uphold the integrity of the RFS and decline issuing any blanket statewide or nationwide waivers from the 2020 RFS blending requirements under the Clean Air Act,” they continued.
The letter is signed by Reps. Abby Finkenauer, D-Iowa; Dave Loebsack, D-Iowa; Roger Marshall, R-Kan.; Collin Peterson, D-Minn.; Rodney Davis, R-Ill.; Angie Craig, D-Minn.; Ann Wagner, R-Mo.; Darin LaHood, R-Ill.; Don Bacon, R-Neb.; Cheri Bustos, D-Ill.; Mark Pocan, D-Wisc.; Jim Hagedorn, R-Minn.; Dusty Johnson, R-S.D.; Mike Bost, R-Ill.; Blaine Luetkemeyer, R-Mo.; Emanuel Cleaver, D-Mo.; Vicky Hartzler, R-Mo.; Cindy Axne, D-Iowa; Jim Baird, R-Ind.; Jeff Fortenberry, R-Neb.; Jason Smith, R-Mo.; Robin Kelly, D-Ill.; Jim Himes, D-Conn.; Sam Graves, R-Mo.; Adam Kinzinger, R-Ill.; Ron Estes, R-Kan.; Jahana Hayes, D-Conn.; Steve Watkins, R-Kan.; Rosa DeLauro, D-Conn.; James Comer, R-Ky.; Scott Peters, D-Calif.; Sean Casten, D-Ill.; John Larson, D-Conn.; Jacki Walorski, R-Ind.; Joe Courtney, D-Conn.; TJ Cox, D-Calif.; David Cicilline, D-R.I.; Adrian Smith, R-Neb.; Lucille Roybal-Allard, D-Calif.; Steve King, R-Iowa; Ann McLane Kuster, D-N.H.; Ron Kind, D-Wisc.; David Scott, D-Ga.; and Rick Crawford, R-Ark.
The Renewable Fuels Association has spoken out to thank the 44 members of the House of Representatives for urging Trump to deny the RFS waiver requests. “RFA is grateful to this bipartisan group of leaders in the House for standing with consumers, farmers and ethanol producers to uphold the integrity of the Renewable Fuel Standard,” Geoff Cooper, president and CEO of the RFA. “While refiners are appealing to governors in a callous effort to evade the RFS under the guise of COVID-19 relief, the law requires—and EPA has previously concluded—that waivers can only be granted when any potential hardship is being caused by the RFS, not any other factor. However, in this case, the governors correctly state the harm is caused by plummeting oil prices attributable to an international oil glut and falling demand caused by COVID-19. Those factors are also hurting ethanol. In fact, half of the nation’s ethanol production capacity was shut down over the past several months.
“The rural communities that depend on a thriving renewable fuels industry are fortunate to have such dedicated supporters in Congress protecting the RFS from endless attacks,” Cooper continued. “These lawmakers understand that caving into the whims of the oil industry and waiving the RFS would not only be illegal, but it would also have devastating impacts on working families and small businesses already reeling from the effects of this terrible pandemic.”
Growth Energy also thanked the representatives for combating oil-backed efforts to undermine the RFS. “Rural America cannot afford another setback, and we’re grateful for the tireless efforts of House leaders to protect our road to recovery by defending the Renewable Fuel Standard,” said Emily Skor, CEO of Growth Energy. “Oil industry efforts to waive the RFS would do nothing to reverse the market challenges facing all fuel makers, but they would eliminate a vital economic lifeline for thousands of rural workers, biofuel producers, and farmers who already face unprecedented hardship. It’s past time for the administration to declare these schemes dead on arrival, so we can all get back to rebuilding America’s agricultural supply chain in the wake of COVID-19.”
A full copy of the letter can be downloaded from Finkenauer’s website.
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Jun 5, 2020
Guardian Energy, Minnesota’s largest ethanol plant, restarted production this week as the state’s battered biofuels industry has begun rebounding.
After motor-fuel demand tanked as COVID-19 stay-at-home orders took hold, ethanol production also plunged this spring to record lows. Plants throughout the country — including four in Minnesota — were temporarily idled.
Three of those plants have now reopened, while other Minnesota biofuel facilities have increased production as ethanol demand and prices have risen from their April nadir.
“It’s not nearly what it was pre-COVID, but every week it is getting a little better,” said Jeanne McCaherty, CEO of Guardian Energy Management.
Guardian Energy in the southern Minnesota town of Janesville is the largest of the state’s 18 ethanol plants, with a production capacity of 149 million gallons per year. The plant, which employs around 50, closed April 2.
The Janesville plant gradually reopened this week and was running at 95% capacity on Thursday. “You don’t just turn a key and it jumps right back up,” McCaherty said.
Granite Falls Energy was idled April 3 and reopened May 18. The Denco II ethanol plant in Morris closed on March 30 and began reopening in the middle of May.
Only Gevo’s facility in Luverne, the state’s smallest ethanol plant, appears to remain closed. Gevo, which aside from ethanol makes isobutanol for jet fuel, was idled on March 31. The company could not be reached for comment.
About 20% of all U.S. ethanol plants remain idled Friday, down from 30% on April 21, according to the Renewable Fuels Association, a trade group.
Meanwhile, U.S. ethanol production has risen to 765,000 barrels per day for the week ending May 29, up from a historic low of 537,000 for the week ending April 24, according to data from the U.S. Energy Information Administration (EIA).
Ethanol production had been running more than 1 million barrels per day before the economic lockdowns prompted by the spread of COVID-19.
“We have seen some slight recovery in both prices and demand in the ethanol industry,” said Brian Kletscher, CEO of Highwater Ethanol in Lamberton and current board president of the Minnesota Bio-Fuels Association, a trade group.
“It has been very, very gradual,” he said. “The industry is still struggling through this.”
Highwater Ethanol had reduced its production earlier this spring to 80% of capacity and is now running at about 90%, Kletscher said.
At Al-Corn Clean Fuel in the southern Minnesota town of Claremont, production over the past two weeks has ramped up to full capacity. At April’s low point, Al-Corn was running at only 38%.
“The market is telling us, if you want to run, there is maybe a little bit of [profit] margin in it, or at least you will break even,” said Al-Corn CEO Randall Doyal. Ethanol producers were generally losing money earlier this spring.
Still, with transportation-fuel demand still considerably below normal, there’s a risk of too much ethanol production being added to the market too quickly, he added.
The ethanol upturn is pegged to a rebound in motor-fuel demand and production: Under the U.S. Renewable Fuel Standard, most gasoline is required to include 10% ethanol.
U.S. gasoline production stood at 7.8 million barrels per day for the week ending May 29, down 2.2 million from a year ago — but up from an April bottom of around 6.2 million, according to EIA data.
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Jun 3, 2020
U.S. fuel ethanol production increased by nearly 6 percent the week ending May 29, while weekly ending stocks of fuel ethanol fell by approximately 3 percent, according to data released by the U.S. Energy Information Administration on June 3.
Ethanol production increased to an average of 765,000 barrels per day the week ending May 29, up from an average of 724,000 barrels per day the previous week. The week ending May 29 marks the fifth consecutive week of growth following sharp declines that began in late March and persisted throughout April due to market impacts caused by the COVID-19 pandemic. Production was down 279,000 barrels per day when compared to the same week of 2019, and down 314,000 barrels per day when compared to the final week of February 2020, before COVID-19 began to impact U.S. fuel markets.
Weekly ethanol ending stocks fell to 22.476 million barrels the week ending May 29, down from 23.176 million barrels the previous week. May 29 marks the sixth consecutive week of falling ethanol stocks following a new record high that was set at 27.689 million barrels the week ending April 17. When compared to the same week of last year, weekly ethanol ending stocks were down 77,000 barrels.
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Jun 2, 2020
The U.S. Food and Drug Administration on June 1 updated guidance to provide additional clarification on the manufacturing and compounding of certain alcohol-based hand sanitizer products to help ensure that harmful levels of impurities are not present in ethanol used in hand sanitizer. The Renewable Fuels Association said the guidance provides clarity, but won’t resolve the shortage of hand sanitizer products.
In its announcement, the FDA said it appreciates industry’s willingness to help meet the increasing demand for alcohol-based hand sanitizers during the COVID-19 pandemic. Early on during the public health emergency, the FDA said it issued temporarily policies to provide flexibility to help meet increased demand for alcohol-based hand sanitizers.
“We previously updated these temporary guidances in April to reflect data submitted by fuel ethanol manufacturers producing ethanol via fermentation and distillation, indicating that at least some of their fuel ethanol products have harmful chemicals, including gasoline and benzene, which are known human carcinogens (cancer-causing agents),” said the FDA in a statement released June 1. “These impurities would not be expected from a typical fermentation and distillation process but may be present in the manufacturing environment of fuel or technical-grade ethanol, due to the use of certain chemicals, equipment or containers.
“The FDA is working with industry to ensure that harmful levels of impurities are not present if ethanol is used in these products,” the agency continued. “Based on careful review and consideration of available data, we are specifying interim levels of certain impurities that we have determined can be tolerated for a relatively short period of time, given the emphasis on hand hygiene during the COVID-19 public health emergency and to avoid exacerbating access issues for alcohol-based hand sanitizer.”
FDA’s updated guidance comes roughly a week after Sens. Joni Ernst, R-Iowa, and Chuck Grassley, R-Iowa, sent a letter to FDA Commissioner Stephen Hahn on May 26 urging the agency to clarify its temporary policy for the manufacture of alcohol-based hand sanitizer products during the COVID-19 pandemic. In that letter, Ernst and Grassley addressed concerns by the agency that gasoline or other fuel additives come into contact with ethanol during the ethanol production process. That concern, they said, “appears to reflect a misunderstanding of how ethanol plants operate.” The senators stressed that “gasoline is not present at ethanol plants, and alcohol for hand sanitizer that is produced at ethanol plants does not come in contact with gasoline, benzene, or other petroleum contaminants.”
Following the FDA’s June 1 announcement, the RFA issued a statement indicating the updated guidance provides clarity to ethanol producers, but said it won’t resolve current shortages of hand sanitizer products.
“While we appreciate that FDA responded to RFA’s request for more clarity and specific interim impurity limits, we do not believe the new guidance will help alleviate the hand sanitizer shortage in any meaningful way,” said Geoff Cooper, president and CEO of the RFA. “We welcome the specificity in the new guidance, but the new interim limits for certain impurities are overly restrictive and create a roadblock for producers who could otherwise supply huge volumes of safe, clean, high-quality ethyl alcohol to hand sanitizer manufacturers. For example, FDA’s new limits for certain impurities are eight times more restrictive than what is typically found in a glass of red wine and twenty times more restrictive than what has been allowed in hand sanitizer by other countries, including Canada, during the COVID-19 pandemic.
“Meanwhile, as hospitals, first responders, nursing homes, restaurants, retail stores, churches, and other public and private spaces seek out new sources of hand sanitizer to address the shortage, the U.S. continues to significantly ramp up imports of hand sanitizer from China and other countries,” Cooper added. “It is unfortunate that we are importing this product from China, when abundant supplies of high-purity American-made ethanol could be used instead. Still, we will continue to work with the FDA to ensure ethanol producers can do their part to combat COVID-19 and provide larger quantities of ethyl alcohol for hand sanitizer.”
Additional information is available on the FDA website.
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May 31, 2020
In Washington, D.C.,according to EIA data analyzed by the Renewable Fuels Association for the week ending May 22, ethanol production shifted 9.2%,or 61,000 barrels per day (b/d), to 724,000 b/d—equivalent to 30.41 million gallons daily and the largest volume since March. However, production remains tempered due to COVID-19 disruptions, coming in 31.5% below the same week in 2019.
The four-week average ethanol production rate rose 7.8% to 651,000 b/d, equivalent to an annualized rate of 9.98 billion gallons.
Ethanol stocks thinned by 1.9% to a 19-week low of 23.2 million barrels. Inventories tightened across all regions except the Rocky Mountains (PADD 4), including a 7.8% drop in the West Coast (PADD 5). Total reserves are 2.4% above year-ago volumes.
The volume of gasoline supplied to the U.S. market, a measure of implied demand, rebounded by 6.8% to 7.253 million b/d (111.19 bg annualized). Gasoline demand remained 22.8% lower than a year ago.
Refiner/blender net inputs of ethanol followed, rising 4.7% to 712,000 b/d, equivalent to 10.91 bg annualized but 24.9% below the year-earlier level.
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May 26, 2020
Sens. Joni Ernst, R-Iowa, and Chuck Grassley, R-Iowa, sent a letter to Food and Drug Administration Commissioner Stephen Hahn on May 26 urging the agency to clarify its temporary policy for the manufacture of alcohol-based hand sanitizer products during the COVID-19 pandemic.
The letter references temporary guidance that was issued by the FDA on March 27 and updated on April 15. In its March 27 guidance, the FDA said ethanol used for hand sanitizer production does not need to meet U.S. pharmacopeia (USP) or food chemical codex (FCC) standards as long as other purity standards were met. “Based on this guidance, biofuel manufacturers made investments and began production of alcohol for hand sanitizer,” Ernst and Grassley wrote.
“On April 15, the FDA inexplicably revised this guidance to require ethanol made for hand sanitizer to adhere to USP or FCC standards unless otherwise approved and requested ethanol companies to submit data regarding impurities,” they continued. “Our staff has received conflicting messages about FDA’s concerns and what standard applies for alcohol for use in hand sanitizer. At one point, the indication was that FDA had become concerned that gasoline or other fuel additives might come into contact with ethanol in the production process, which appears to reflect a misunderstanding of how ethanol plants operate. Gasoline is not present at ethanol plants, and alcohol for hand sanitizer that is produced at ethanol plants does not come in contact with gasoline, benzene, or other petroleum contaminants.”
Ernst and Grassley indicated that their constituents in Iowa have said most, if not all, submitted samples of ethyl alcohol have been rejected. “It appears that these rejections may be based on levels of acetaldehyde, a substance that occurs naturally in the distillation process, comparable to what is common in alcoholic beverages,” they wrote. “We note that Health Canada—the Canadian government’s equivalent to FDA—has published a temporary standard that slightly relaxes limitations on acetaldehyde so that ethanol producers may help meet the growing need for hand sanitizer. We trust the FDA will use science and data to ensure the proper threshold for acetaldehyde in hand sanitizer, and I encourage you to consider Canada’s approach.”
The senators ask the FDA to update the April 15 guidance to clarify the threshold for acetaldehyde to give regulatory certainty and end the confusion that renewable fuel manufacturers currently face.
A full copy of the letter can be downloaded from Grassley’s website.
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May 22, 2020
Today, U.S. Senator Amy Klobuchar held a conference call with CEO of Al-Corn and Chairman of Guardian Energy Janesville Randy Doyal and Vice President of Federal Advocacy for POET Energy Rob Walther to discuss the challenges ethanol plants in Claremont, Janesville, Crystal Lake and throughout southern Minnesota are facing due to the coronavirus pandemic.
“The coronavirus pandemic has caused market volatility and decreased demand for many agricultural commodities, which has impacted farmers and rural communities particularly hard,” Klobuchar said.“Renewable fuel processing plants provide stability in our agricultural supply chain and employ thousands of people in rural areas. I will continue fighting in the Senate to ensure farmers and workers receive our support during these challenging times.”
This week, Klobuchar and Senator Chuck Grassley (R-IA)introduced bipartisan legislation to support biofuel producers that are feeling economic hardship from fuel demand and ethanol price declines as a result of the coronavirus pandemic. TheRenewable Fuel Feedstock Reimbursement Act will require the U.S. Department of Agriculture (USDA) to reimburse biofuel producers for their feedstock purchases from January 1, 2020 through March 31, 2020 through the Commodity Credit Corporation.
Klobuchar and Grassley have led bipartisan letters calling for a strong Renewable Fuel Standard (RFS) as the EPA has worked toward finalizing its annual rules on biofuels volume requirements. Klobuchar and Grassley also led a bipartisan group of senators urging the Administration to cease issuing small refinery waivers and reject changes to the RFS that would upend stability and predictability for small businesses, and rural communities.
Read the original press release here.
May 20, 2020
U.S. ethanol production for the week ending May 15 was up nearly 8 percent while weekly ethanol ending stocks fell by more than 2 percent, according to data released on May 20 by the U.S. Energy Information Administration. The data shows U.S. ethanol production and use continues to slowly rebound following sharp declines in March and April due to market impacts caused by the COVID-19 pandemic.
U.S. ethanol production averaged 663,000 barrels per day the week ending May 15, up from an average of 617,000 barrels per day the previous week. Production was down 409,000 barrels per day when compared to the same week of last year, and down 416,000 barrels per day when compared to the volume of ethanol produced during the final week in February, before COVID-19 began to impact U.S. fuel markets.
Weekly ethanol ending stocks fell to 23.63 million barrels the week ending May 15, down from 24.19 million barrels the previous week, and down from a record-setting 27.689 million barrels the week ending April 17. When compared to the same week of 2019, weekly ethanol ending stocks were up only 222,000 barrels.
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May 18, 2020
The true question may not be which came first—the chicken or the egg—but rather, what was the color of the yolk? In Mexico, the U.S. Grains Council is working with poultry producers to examine how U.S. corn distillers oil (CDO)—a co-product of ethanol production—can help achieve the darker yellow egg yolk desired by consumers and boost the immune systems of the chickens that lay those eggs.
Mexican consumers prefer yellow-skinned chickens and dark yellow egg yolks. Shifting the color of an egg yolk from pale yellow to dark yellow can be accomplished by changing a chicken’s diet. To do so, Mexican layer producers often add a pigmenting agent, mainly marigold extract, to feed rations, which also adds to the cost of the finished feed.
Council staff proposed a different solution—CDO, which was already being added to Mexican poultry rations for its energy value. A research project conducted with North Carolina State University successfully demonstrated CDO contained carotenoid pigments, naturally occurring pigments that would enhance yolk color and provide other nutritional benefits.
The Council—using a combination of funding from the USDA’s Market Access Program and Agricultural Trade Promotion program—took this information to Mexico’s largest importer and distributor of CDO and formed a partnership to conduct one-on-one visits with major poultry companies.
Throughout 2019, the Council conducted specific batch testing on imported product and developed marketing materials and feeding guides. The Council also set up booths to provide information and facilitate networking with suppliers at meetings for ANFACA, one of the largest grain and feed associations in Mexico, and AVECAO, the largest poultry event in Tepatitlan.
“Several companies in Mexico were already utilizing CDO, but for energy content value, not pigment,” said Patricia Esqueda, USGC western Mexico marketing specialist. “While many of the nutritionists at poultry companies did not initially look at pigment as an advantage of CDO, they did consider the total carotenoid content as an excellent source of antioxidants that would promote healthy immune systems in the birds.”
By fall 2019, the Council convinced three additional poultry companies to import CDO for the first time, making weekly purchases. Other companies also expressed interest and received CDO samples to test in their rations. While CDO supplies are currently limited due to constraints within the U.S. ethanol industry, these companies remain engaged with the Council and interested in adding the co-product to their formulations.
“Egg yolks have been looking paler in Mexico, due to the current pricing and availability for both U.S. CDO and Chinese marigold,” Esqueda said. “But as customer preferences continue to exist for a darker yolk, we do expect demand for CDO to come back in the poultry market as pigment prices stabilize.”
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May 15, 2020
The U.S. ethanol industry is showing some signs of recovery as government officials ease stay-at-home orders that depressed fuel demand, while a vote Friday in Congress could bring the industry one step closer to federal aid, industry officials said.
Fuel demand collapsed by about a third with the spread of the novel coronavirus this spring, and U.S. ethanol production capacity halved as around 150 facilities either idled or reduced rates. Now as restrictions ease and gasoline demand inches higher, about 140 facilities are idled or running at reduced rates, Renewable Fuels Association President Geoff Cooper said on Friday.
“It seems the worst may be behind us,” Cooper said in a call with reporters. “But make no mistake, we still have a very long way to go to climb out of the hole that COVID-19 put us in.”
U.S. production of ethanol - a corn-based fuel that refiners must blend into their gasoline - has increased since the start of May, rising to 617,000 barrels per day in the week to May 8, U.S. Energy Information Administration data showed. Production bottomed at the end of April, at 537,000 bpd.
Output is still down more than 40% from year-ago levels, though. And while inventories fell in the most recent week to 24.2 million barrels, stored supply is still nearly 9% higher than the same time last year, EIA data showed.
“We are seeing inventories come down, but we need to see frankly many more weeks of that to get this thing back into balance,” said Neil Koehler, chief executive of Pacific Ethanol.
The increased production comes as Congress readies a vote on Friday for a coronavirus relief bill that includes aid for the biofuels industry. After assistance to the industry failed to make its way into the first relief package from Congress, advocates hope that the new bill will pass the House of Representatives on Friday before moving on to the Senate.
The bill, introduced by House Democrats, would reimburse producers that suffered unexpected market losses because of the pandemic from Jan. 1 through May 1.
“I’m confident it will get through today’s legislation, but after that, that’s another story,” Congresswoman Cheri Bustos, a biofuels advocate who represents Illinois, told Reuters. “More help will be necessary. We need help in the ag industry; we need help for our family farmers.”
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May 11, 2020
A group of 11 ag and biofuel groups sent a letter to House Speaker Nancy Pelosi and Senate Majority Leader Mitch McConnell on May 11 asking congress to provide COVID-19 relief for ethanol and biodiesel producers.
“The situation we face is dire,” the groups wrote. “More than 130 biofuel plants have already partially or fully shut down as motor fuel demand plunged to 50-year lows. America’s biofuel plants purchase annually more than one-third of U.S. corn and U.S. soybean oil, and the loss of those markets has depressed farm income and will continue to push corn and soybean prices down dramatically.
“The damage has rippled across the entire agricultural supply chain,” the continued. “Ethanol plants are the top supplier of carbon dioxide (CO2) to the food industry, and shutdowns have triggered commercial CO2 supply shortages, inhibiting the ability of our food and beverage sector to manufacture, preserve and supply food. Biodiesel plants provide critical demand for soybean oil, distillers corn oil, animal fats from livestock production, and recycled oils from restaurants. Reduced demand for these oil byproducts will result in higher prices for livestock feed and ultimately higher prices for consumers. And shortages of dried distiller grains (DDGs)—a high-protein animal feed produced by ethanol plants—are already impacting livestock rations and meat prices.”
The letter notes that biofuel producers are doing what they can to support the public health response by repurposing ethanol and glycerin supplies to produce hand sanitizer. “However, sanitizer markets are not nearly substantial enough to sustain our workforce and bridge the industry through the crisis,” the groups said.
The letter states that some facilities are eligible for CARES Act loan programs, but stresses that the legislation did not include specific relief for biofuel producers. In addition, the USDA’s subsequent disbursement of Commodity Credit Corp. funds excluded the biofuel sector despite letters of support sent to Agriculture Secretary Sonny Perdue by broad, bipartisan coalitions in the House and Senate.
“While it is important that biofuel producers are included in any infrastructure or tax legislation designed to hasten America’s long-term economic recovery from COVID-19, relief is needed now to ensure these producers are positioned to bring renewable fuel production back online when conditions improve,” the groups wrote. “It is vital that the next COVID-19 relief package include immediate, temporary, and direct assistance to help the U.S. biofuel industry retain its skilled workforce and mitigate the impact of plant closures on the food and feed supply chain and rural communities. There are numerous mechanisms overseen by the USDA that could quickly facilitate direct assistance to the biofuel industry. Preserving the vital biofuels market for farmers supports long-term demand for agriculture and farm sector recovery.”
The letter is signed by the Renewable Fuels Association, Growth Energy, National Biodiesel Board, Farm Bureau, National Corn Growers Association, American Soybean Association, National Farmers Union, National Oilseed Processors Association, National Renderers Association, National Sorghum Producers, and Fuels America. A full copy of the letter is available on the Fuels America website.
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May 8, 2020
Three dozen Midwestern electric cooperatives and rural electric associations send a letter to 20 federal lawmakers on May 7 asking Congress to provide much-needed economic relief for rural America, which continues to suffer from the impacts of the COVID-19 pandemic.
“Rural electric cooperatives were created to provide electricity to farms and rural communities and have continued to expand this essential service as rural America has grown and prospered,” the groups said in the letter. “Our member-owners have invested billions in not only electric infrastructure through their cooperative to serve these areas, but also in helping to develop the rural economy in which they live. These investments have allowed for diversification into biofuels, food processing, and other business development opportunities.”
The letter notes that a steep drop in liquid fuel demand has had a major impact on biofuel plants. Rural food processing facilities have also been severely impacted by the pandemic. “These events have left producers of several agricultural commodities without a market for their product, forcing some to euthanize animals or destroy their products,” the groups wrote. “The pandemic has compounded the impacts of low commodity prices and extreme weather events that had already created a struggling farm and rural economy.”
As congress considers a new COVID-19 stimulus package, the groups are asking for relief that specifically benefits food and ethanol processing plants, along with the farmers and ranchers who serve them. “Estimates show as much as half of U.S. ethanol production has been idled,” the groups continued. “Without ethanol sales, our corn farmers are significantly harmed. Reduced ethanol production and livestock processing threatens our food and energy security, and in turn results in reduced electric load, a burden that ultimately falls on the individual members of an electric cooperative. The combination of these issues poses a significant threat to the overall wellbeing of the rural communities that we serve.”
The letter also urges the senators and representatives to reject any attempts by EPA to grant new RFS waivers and encourage the agency to rein-in its use of small refinery exemptions (SREs).
“Further, additional economic support is necessary through the U.S. Department of Agriculture (USDA),” they wrote. “We have learned that the USDA is unlikely to directly provide biofuels producers any of the increased funding from the Coronavirus Aid, Relief and Economic Security Act appropriated to the Commodity Credit Corporation. Any additional stimulus legislation must provide biofuels-specific support. Failure to do so will significantly threaten investments made to develop biofuel and agricultural processing infrastructure, and the role these facilities play in supporting rural communities.
“Again, these industries are absolutely vital to the economic health of rural America, and we appreciate your consideration of these requests,” they continued.
The letter is signed by Basin Electric Power Cooperative, Power Electric Cooperative, McLean Electric Cooperative, Dakota Valley Electric Cooperative, Roughrider Electric Cooperative, Minnkota Power Cooperative, East River Electric Power Cooperative, Central Electric Cooperative, FEM Electric Association, Northern Electric Cooperative, Oahe Electric Cooperative, Sioux Valley Energy, Southeastern Electric Cooperative, Agralite Electric Cooperative, Rural Electric Association, Minnesota Valley Cooperative Light and Power Association, Redwood Electric Cooperative, South Central Electric Association, Upper Missouri Power Cooperative, Harrison County Rural Electric Cooperative, North West Rural Electric Cooperative, Northwest Iowa Power Cooperative, Corn Belt Power Cooperative, Iowa Lakes Electric Cooperative, Raccoon Valley Electric Cooperative, Midland Power Cooperative, Nishnabotna Valley Rural Electric Cooperative, Butler County Rural Electric Cooperative, L&O Power Cooperative, Osceola Electric Cooperative, Nebraska Electric Generation and Transmission Cooperative, North Dakota Association of Rural Electric Cooperatives, Iowa Association of Electric Cooperatives, South Dakota Rural Electric Association, Minnesota Rural Electric Association, and Nebraska Rural Electric Association.
The letter is addressed to Sens. John Hoeven, R-N.D.; Kevin Cramer, R-N.D.; John Thune, R-S.D.; Mike Rounds, R-S.D.; Chuck Gassley, R-Iowa; Joni Ernst, R-Iowa; Deb Fischer, R-Neb.; Ben Sasse, R-Neb.; Amy Klobuchar, D-Minn.; Tina Smith, D-Minn.; and Reps. Kelly Armstrong, R-N.D.; Dusty Johnson, R-S.D.; Steve King, R-Iowa; Cindy Axne, D-Iowa; Abby Finkenauer, D-Iowa; Dave Loebsack, D-Iowa; Adrian Smith, R-Neb.; Jeff Fortenberry, R-neb.; Jim Hagedorn, R-Minn.; and Collin Peterson, D-Minn.
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May 5, 2020
The U.S. exported 139.93 million gallons of ethanol and 899,730 metric tons of distillers grains in March, according to data released by the USDA Foreign Agricultural Service on May 5. Exports of both products were down when compared to March 2019.
The 139.93 million gallons of ethanol exported in March was down significantly from the 194.16 million gallons exported in February but was relatively flat when compared to the 140 million gallons exported during the same period of 2019.
The U.S exported ethanol to nearly four dozen countries in March. Brazil was the top destination for U.S. ethanol with 37.22 million gallons, followed by Canada at 27.49 million gallons, and India with 19.63 million gallons.
The value of U.S. ethanol exports was at $241.64 million in March, down from $323 million in February, but up from $234.26 million in March 2019.
Total ethanol exports for the first three months of the year reached 485.32 million bgallons at a value of $821.17 million, compared to 381.74 million gallons at a value of $612.07 during the same period of last year.
The U.S. exported 899,730 tons of distillers grains in March, up from the 852,904 tons exported in February, but down from 956,828 tons exported in March 2019.
The U.S. exported the ethanol coproduct to more than three dozen countries in March. Mexico was the top destination with 190,125 metric tons, followed by Vietnam at 139,974 metric tons and South Korea at 127,636 metric tons.
The value of U.S. distillers grains exports reached $194.77 million in March, up from $178.24 million in February, but down from $202.65 million in March 2019.
Total U.S. distillers grains exports for the first quarter of 2020 reached 2.73 million metric tons at a value of $572.49 million, compared to 2.45 million tons at a value of $518.13 reported for the same period of last year.
Additional data is available on the USDA FAS website.
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