Increased ethanol exports needed to absorb production increase
Ethanol exports will need to exceed last year’s level to compensate for slow-growing domestic consumption in the face of growing ethanol production, concludes ag economist S. Patricia Batres-Marquez, in a recent data analysis from the University of Iowa’s AgMarketing Resource Center.
The share of ethanol exports has more than doubled from the 3 percent share of total U.S. production in 2010 to 6.8 percent in 2016. The U.S. became a net exporter of ethanol in 2010, exporting 399 million gallons. In 2016, that had grown to 1.05 billion gallons, an increase of 26 percent from the previous year.
A recent Short-Term Energy Outlook from the Energy Information Administration, the AgMRC analysis points out, “forecast 2017 ethanol production will increase 2.9 percent to 1.03 million barrels per day (43.26 million gallons per day) from 2016 levels. 2017 fuel ethanol blended into motor gasoline, on the other hand, is forecast to remain at the 2016 level of 0.94 million barrels per day (39.48 million gallons per day). 2017 gasoline consumption is forecast to marginally decline (0.4 percent) to 9.29 million barrels per day (390.18 million gallons per day) year over year. Under this scenario, ethanol production would exceed consumption by 0.08 million barrels per day (3.56 million gallons per day) and ethanol exports would need to exceed 1.05 billion gallons, the level reached in 2016, to compensate for the ethanol surplus generated by growing ethanol production, combined with a stationary or slow-growing domestic consumption.”
To view the entire analysis, which includes historical national and state production data and a review of gasoline and ethanol consumption trends, click here.