In the News

Ethanol Producer Magazine

February 26, 2019

By Erin Voegele

The USDA has released its Grain Crushings and Co-Products Production report with data from December, reporting that corned consumed for fuel alcohol was up slightly from the previous month, but down year-over-year.

Total corn consumed for alcohol and other uses as 511 million bushels in December, up 2 percent from November, but down 5 percent from December 2017. December usage included 92 percent for alcohol and 8 percent for other purposes.

Corn consumed for beverage alcohol was at 2.55 million bushels in December, down 13 percent from November, but up 13 percent from the same month of the previous year.

Corn for fuel alcohol was at 461 million bushels, up 1 percent from November, but down 6 percent when compared to December 2017. Corn consumed for dry milling and wet milling fuel production as 90.5 percent and 9.5 percent, respectively.

Sorghum consumed for fuel alcohol production was at 3.045 million hundredweight (cwt) (170,520 tons), down from 5.314 million cwt in November, but up from 2.295 million cwt in December 2017.

At dry mills, condensed distillers solubles production reached 133,380 tons, up from 128,805 tons in November and 124,098 tons the previous December. Corn oil production fell to 153,439 tons, down from 154,778 tons in November and 174,078 tons in December 2017. Distillers dried grains production fell to 238,422 tons, down from 376,137 tons in November and 442,427 tons in December of the previous year. Distillers dried grains with solubles production fell to 1.927 million tons, down from 1.93 million tons in November and 1.967 tons in December 2017. Distillers wet grains production was at 1.397 million tons, up from 1.345 million tons in November, but down from 1.431 million tons in December of the previous year. Modified distillers wet grain production fell to 466,681 tons, down from 471,972 tons in November and 511,763 tons in December 2017.

At wet mills, corn germ meal production was at 60,677 tons, up from 54,967 tons in November, but down from 71,732 tons in December 2017. Corn gluten feed production was at 390,178 tons, up from 285,362 tons in November, but down from 318,694 tons in December of the previous year. Corn gluten meal production was at 88,638 tons, up from 85,510 tons in November, but down from 91,092 tons in December 2017. Wet corn gluten feed production fell to 256,146 tons, down from 257,003 tons in November and 309,765 tons in December of the previous year.

At dry and wet mills, carbon dioxide captured reached 227,931 tons, up from 222,757 tons in November and 209,638 tons in December 2017.

Read the original article: USDA: December Corn Use for Ethanol Up from November

CNBC

February 26, 2019

By Tom DiChristopher

U.S. trade negotiators hope to convince Beijing to lower tariffs on ethanol, putting American farmers in a position to capitalize on rising demand for the corn-based biofuel in China.

The Trump administration's trade team has made the request, but their Chinese counterparts have yet to respond, Agriculture Secretary Sonny Perdue told reporters on Tuesday.

"They are engaged in conversation, they listen and hear us, but we are at this stage unable to determine the willingness factor," Purdue said, according to a Reuters report.

China once represented a bright opportunity for American corn farmers and ethanol producers, but their prospects have faded in recent years.

In 2016, China was the third biggest market for U.S. ethanol, accounting for nearly 20 percent of U.S. exports and drumming up over $300 million in revenues, according the Renewable Fuels Association. But after two years of rising trade tensions, China took just 4 percent of U.S. ethanol exports in 2018, RFA says.

Trade first dropped off after China put a 30-percent charge on U.S. ethanol in 2017. Last year, China increased the tariff to 45 percent after the Trump administration put new duties on foreign aluminum and steel.

Under a new deal, Beijing would ideally set the import tax on ethanol below 15 percent, Perdue said on Tuesday.

That would potentially allow U.S. ethanol suppliers to take advantage of Beijing's plans to introduce E10 — a gasoline blend containing 10 percent ethanol — across the country next year.

To achieve that goal, China needs to source 15 million tons of ethanol per year, a nearly sevenfold increase from the country's current consumption, according to IHS Markit. Today, China only has enough capacity to produce about 3 million tons per year.

Clearing a path for more U.S. biofuel exports would be a boon to President Donald Trump, who has had a tense relationship with the ethanol industry and agricultural states. The Trump administration has upset Big Corn by handing out hardship waivers to small refineries, which allow them to circumvent U.S. requirements to blend ethanol into gasoline.

The Trump administration has also considered changes to U.S. biofuel policy that ethanol producers worry would shrink domestic demand for their product.

Read the original article: US Aims to Lower Beijing's Tariff on Ethanol Ahead of Chinese Demand Boom

Ethanol Producer Magazine

February 20, 2019

By Governors’ Biofuels Coalition

The Governors’ Biofuels Coalition announced Feb. 18 that Minnesota Gov. Tim Walz will serve as chair and South Dakota Gov. Kristi Noem will serve as vice chair of the coalition during 2019.

For over 20 years, the Governors’ Biofuels Coalition has provided regional and national leadership on biofuels policy. The bipartisan group is comprised of governors from across the nation.

“I look forward to working with Governor Noem to advance the bipartisan work of the Governors’ Biofuels Coalition. The production and use of biofuels increase family incomes in rural America, diversifies our nation’s energy portfolio, and provides consumers a choice at the fuel pump,” Walz said.

“We must adopt state and national policies that grow a biofuels industry vital to our states’ economies and the nation’s need to reduce carbon and other harmful emissions. Those policies include steps to open the market for ethanol as a source of clean octane to reduce the toxic aromatic content of gasoline and ground level precursors. We will continue to urge EPA Administrator Wheeler to honor President’s Trump commitment to make E15 fuel available this summer as well as many overdue EPA regulatory reforms.”

“Governor Noem and I will ask our governor colleagues to consider requiring the use of higher ethanol blends in all state fleet vehicles. Over a decade ago, many of the nation’s governors required the use of E10 in state fleet vehicles, which was a critical first step to consumer acceptance of higher ethanol blends,” Walz said.

“I’m honored to serve as vice chair of the Coalition and to continue working to strengthen the energy independence of our states and nation,” Noem said. “Minnesota, South Dakota and all members of the Coalition continue to play a major role in the nation’s energy policies.”

“Renewable energy benefits everyone, from energy consumers to farmers to anyone who breathes our air,” Noem concluded.

Walz and Noem both thanked Iowa Gov. Kim Reynolds for not only her leadership of the Coalition last year but for her tireless national leadership on renewable energy policy.

Read the original article: Walz, Noem to Lead Governors’ Biofuels Coalition in 2019

Ethanol Producer Magazine

February 18, 2019

Syngenta

On Feb. 13, Syngenta announced a three-year marketing agreement with Kansas Ethanol LLC to use Enogen corn enzyme technology at its 80 MMgy ethanol plant in Lyons, Kansas.

Enogen corn enzyme technology is an in-seed innovation available exclusively from Syngenta and features the first biotech corn output trait designed specifically to enhance ethanol production. Using modern biotechnology to deliver best-in-class alpha amylase enzyme directly in the grain, Enogen corn eliminates the need to add liquid alpha amylase and can help an ethanol plant significantly reduce the viscosity of its corn mash, improving plant performance. Numerous trials have shown that Enogen hybrids perform equal to or better than other high-performing corn hybrids.

Enogen corn will provide the Kansas Ethanol facility with an industry-leading enzyme for enhanced ethanol production, while also supporting local growers and the community. The Kansas Ethanol facility will be accepting its first load of Enogen grain this fall. 

“This agreement will enable us to buy more corn directly from farmers and purchase alpha amylase locally, in the form of high-quality grain,” said Mike Chisam, President and CEO of Kansas Ethanol. “We believe Enogen corn will create value for our plant, our growers and our community.” 

Farmers who grow Enogen corn are eligible to earn an additional premium per Enogen bushel. To date, more than $100 million in premiums have been paid to Enogen growers. According to data from Iowa State University, these premiums create an additional $63 million in economic activity for a total of $163 million in cumulative economic benefit to the region.

“We are proud to partner with Kansas Ethanol to help keep enzyme dollars local and help them invest in their local community,” said Jeff Oestmann, head, biofuels operations—Enogen at Syngenta. “Syngenta is committed to the success of the ethanol industry through helping plants operate more efficiently and providing growers the opportunity to serve as enzyme suppliers.”

Read the original article: Kansas Ethanol Signs Agreement to Use Enogen Corn From Syngenta

Pine and Lakes Echo Journal

February 15, 2019

By Representative John Poston

The ethanol industry has great potential to improve agricultural communities in Minnesota, boosting the economy and helping our hardworking farmers provide for their families.

Over the past five years, farm income has fallen by 46 percent. One thing that all Americans can do to help is use a biofuel that we make and sell right here at home. E15, a 15 percent ethanol blend, is made from farm crops like corn.

Minnesota farmers rely on ethanol plants to buy their crops and convert them into ethanol. This provides farmers a valuable market for their crops and keeps prices at the pump low. Due to outdated regulations, the Environmental Protection Agency has restricted the sale of E15, making it unavailable during the summer months, the busiest season of travel for motorists.

Minnesotans have been champions of value-added agriculture long before this decision, but we are on a deadline.

The fix for E15 must be in place by June 1 to benefit Minnesota drivers and farmers. Some in the fossil fuel industry have sought to stall this needed action. We cannot afford any delays that would risk another year of sagging rural incomes and economic uncertainty in corn country.

The EPA needs to deliver on President Trump's promise to make E15 a reality. Minnesota farmers are depending on it.

Rep. John Poston,

District 9A

R-Lake Shore

Read the original letter to the editor: Ethanol Fix is Vital for Minnesota Farmers

Reuters

February 11, 2019

By Humeyra Pamuk 

The U.S. Environmental Protection Agency is considering releasing its draft proposal to expand sales of higher ethanol blends of gasoline without including simultaneous measures it promised the oil industry to curb biofuel credit speculation, according to three sources familiar with the matter.

The move would help the agency lift a summertime ban on sales of so-called E15 gasoline in time for the U.S. driving season, but is likely to anger oil refiners that had been asking the Trump administration for biofuel credit market reforms to reduce their costs.

If EPA passed on introducing biofuel credit trading limits, it would leave the door open to potential speculative price surges that could cost refiners like Valero Energy Corp hundreds of millions of dollars. President Donald Trump announced in October he was directing the EPA to allow year-round sales of E15, in a win for the powerful corn industry which supplies ethanol. E15 gasoline contains 15 percent ethanol, versus the 10 percent found in most U.S. gasoline.

The ban had been imposed over concerns that E15 contributes to smog in hot weather.

EPA spokesman Michael Abboud declined to comment.

The EPA had initially planned to combine credit trading limits into the E15 rule as a concession to the oil industry, which says speculation increases the price of biofuel credits it must purchase to comply with federal law.

Under the U.S. Renewable Fuels Standard oil refiners have to blend increasing volumes of biofuels into the nation’s gasoline and diesel each year, or purchase credits - called Renewable Identification Numbers - from those who do.

The combined draft proposal was scheduled for release this month, and was meant to be finalized and implemented by June.

“The EPA has been seriously looking at dropping the RIN reform to speed up the process on E15,” one industry source with knowledge of the matter said.

One other source said that the EPA had already decided to delay the credit trading limits. “They separated the RIN reform to ensure that the (E15) rule would get done in a timely manner,” the source said.

The sources asked not to be named discussing the matter.

The agency is still working to release its draft rule for E15 by the end of the month, possibly within days, and is planning to expedite the rule-making process to finish it by June when seasonal driving demand picks up.

The recent partial government shutdown in the United States had raised concerns the effort might not be completed on time because agency workers were furloughed. Bill Wehrum, a senior EPA official, in charge of the department drafting the rule, said the agency would still make it ready for summer driving season.

Read the original article: Exclusive: EPA May Issue E15 Gasoline Plan Without Biofuel Credit Trade Limits - Sources

Renewable Fuels Association

February 8, 2019

News Article

U.S. ethanol exports through November 2018 reached 1.56 billion gallons, up 31% from the same period a year earlier and already a calendar-year record. Exports remained robust in November although volumes for the month decreased 16% to 147.9 million gallons (mg), according to government data released this morning and analyzed by the Renewable Fuels Association (RFA). In a departure from recent trends, sales were heavily concentrated in just three countries accounting for nearly three-fourths of all U.S. ethanol shipments in November. Brazil imported 51.2 mg, representing 35% of total U.S. export sales. While this was 3.2 mg lower (-6%) than October volumes, it was enough to secure Brazil’s position as the top U.S. ethanol customer for a second straight month. Canada decreased its imports of American ethanol by 8% to 28.4 mg, the lowest volume in seven months but still 19% of total ethanol shipments in November. Volumes exported to India were a solid 28.1 mg (19% of U.S. ethanol exports), slipping just 3% from a record offtake in October. Mexico imported a record 4.8 mg, up 144% for the month.

The Netherlands (8.2 mg, down 21%), South Korea (6.2 mg, down 20%), and Spain (4.3 mg, up 156% to a 13-month high) were other top markets. Notably, after purchasing 6.2 mg in U.S. imports in October, the Peruvian market essentially disappeared with the implementation of countervailing duties on U.S. ethanol by their government in November.

November exports of undenatured fuel ethanol were 90.5 mg, an increase of 10.9 mg (14%). Brazil purchased 51.2 mg (up 10 mg or 23%), representing 57% of our undenatured export market while exports to India at 14.6 mg were down 10 mg (41%). Expanded volumes were shipped to the Netherlands (8.2 mg, up 7 mg), Mexico (4.8 mg), Spain (4.3 mg), and South Korea (2.8 mg) in November while the Philippines (2.4 mg) cut imports in half.

American producers shipped 41.0 mg of denatured fuel ethanol in November, down 55% from the October record (91.4 mg) and the smallest volume in ten months. Most of the global export market contraction can be attributed to quiet trading in six major markets (Brazil, the Netherlands, the United Arab Emirates, Peru, Oman, and the Philippines) that were responsible for cumulative imports of over 46 mg in October. Canada captured two-thirds of our denatured fuel export market with 25.7 mg of product, despite a 9% decrease from prior month sales. India’s November purchases were up 70% for a 13-month high of 7.5 mg, accounting for 18% of our denatured fuel ethanol market. Other top customers were Colombia (2.6 mg), South Korea (2.5 mg), and Jamaica (2.2 mg).

November sales of American denatured non-fuel ethanol skyrocketed to a record 12.3 mg, up from 2.5 mg in October. India re-entered the market to purchase 6.0 mg (48% of total sales), Nigeria also stepped back in with 3.6 mg (29% share) in sales, and 2.6 mg crossed into Canada (up 8%). November U.S. exports of undenatured non-fuel product more than doubled to 4.1 mg. The majority of product shipped to Saudi Arabia (1.7 mg), Japan (1.3 mg), and South Korea (0.9 mg).

The United States imported 9.9 mg of undenatured ethanol from Brazil in November. Total year-to-date U.S. ethanol imports stand at 66.9 mg—essentially all sourced from Brazil. This is 13% behind last year at this time.

November exports of U.S. dried distillers grains with solubles (DDGS)—the main animal feed co-product generated by dry mill ethanol plants—were 1.017 million metric tons (million mt). While shipments tapered slightly (-0.2%), November was the sixth straight month that global demand breached 1 million mt. Mexico purchased 174,465 mt (up 9%) to capture 17% of the market. U.S. shippers sent 166,008 mt of DDGS to Vietnam, up 47% and the largest volume in nearly two years. Shipments of 97,600 (up 1%) entered Indonesia to set a new monthly record. U.S. DDGS export volumes to some key markets contracted, although demand remained robust: Thailand (79,603 mt, -14%), South Korea (71,699 mt, -12%), Canada (51,787 mt, -18%), and the United Kingdom (48,598 mt, -33%). Year-to-date U.S. DDGS exports are 10.99 million mt, implying an annualized total of 11.99 million mt. If realized, U.S. distillers grains exports would capture the second-largest annual volume on record.

Read the original article: Strong Global Demand for U.S. Ethanol and DDGS Continues into November

CNBC

February 6, 2019

The United States has asked Brazil to consider lifting tariffs imposed on its ethanol exports and is hopeful of a positive outcome, a senior official at the U.S. Department of Agriculture said on Wednesday.

Brazil currently charges a 20 percent tariff on ethanol imports surpassing 150 million liters a quarter, in a bid to shield local farmers from foreign competition.

"Our hope is that the warm relations that exist between our presidents and how that cascades down might let us find some relief," Department of Agriculture Under Secretary for Trade and Foreign Agricultural Affairs Ted McKinney said on a conference call from Brasilia.

McKinney and U.S. chief agricultural negotiator Gregg Doud have been in Brazil to hold talks with Brazilian government officials. McKinney said he was optimistic for change, although so far Brazil has not indicated that they would lift the tariffs.

McKinney said Brazil had previously said it would reassess the tariffs two years from the September 2017 date on which they were imposed. "You can imagine there's always run-ups to that.

Nobody said it is a hard date and that's another reason we are having a discussion," he said.

The U.S. delegation was set to meet with the Brazilian ministry of agriculture, he said.

Brazil's new President Jair Bolsonaro, a 63-year-old former army captain and admirer of U.S. President Donald Trump, has quickly deepened ties with the United States and Israel.

Bolsonaro said last year that he would like to see Brazil retake global leadership in ethanol production, which it lost to the United States some years ago.

Read the original article: US Asks Brazil to Consider Lifting Tariffs on Ethanol Exports