For years, corn ethanol was a cheap source of octane for gasoline blenders in the United States and an attractively priced U.S. export. Nearly 850 million gallons of ethanol were shipped to foreign buyers in each of the past two years, says economist Darrel Good of U-Illinois. Thanks to the prolonged decline of petroleum prices, gasoline costs less than ethanol nowadays. But the upside-down situation is not likely to impair exports, says Good in an article at farmdoc daily.
“Several importers of U.S. ethanol, including Canada and Brazil … have mandates for domestic biofuels consumption which will support ethanol consumption in those countries,” writes Good. “In addition, the role of ethanol as a low-cost octane enhancer is likely to support consumption of ethanol even with low gasoline prices. As a result, U.S. ethanol exports are expected to remain large in 2016.”
Exports amounted to nearly 6 percent of U.S. production last year, which Good calculates at a record 14.8 billion gallons, based on preliminary data. Canada was the destination of 30 percent of the exports, with 14 percent going to Brazil, 9 percent to the Philippines, 8 percent to China and 7 percent to South Korea.
Besides ethanol, corn processors produced 27.7 million tons of distillers dried grains last year, with half of it being exported. China was the major buyer.