Ethanol Exports Start 2014 Higher

Exports of U.S. ethanol started 2014 at the highest level seen in over two years.

rfa-annAccording to U.S. Census Bureau data, ethanol exports in January totaled 86 million gallons, which is the highest monthly volume since December 2011. “Exports were up a third from December 2013, while imports remained sparse, meaning the United States was a net ethanol exporter by the widest margin in over two years,” according to Renewable Fuels Association research analyst Ann Lewis, writing on the E-xchange blog.

Brazil was the top customer for U.S. ethanol, beating out Canada for the number one spot, importing nearly 23.9 million gallons, the largest monthly volume to Brazil in two years. Exports to Canada dropped 36% from December to 18.8 million gallons (mg). Rounding out the top destinations were the United Arab Emirates (12.4 mg), India (10.7 mg), the Philippines (5.5 mg), and Mexico (3.3 mg).

Meanwhile, exports of the ethanol co-product distillers dried grains (DDGs) were lower in January, down 9% to 903,827 metric tons (mt). Lewis notes that China was again the leading destination with 344,147 mt. “However, China’s market share scaled back to 38%, in contrast with its majority stake (56%) of U.S. DDGs exports averaged over the second half of 2013,” writes Lewis. Mexico (140,664 mt), South Korea (77,977 mt), Vietnam (48,514 mt), and Japan (44,505 mt) rounded out the top five DDGS markets in January.

Distilers Grains Exports Record High in 2013

Patriot Renewable Fuels DDGsU.S. exports of the ethanol co-product distillers grains set a new record last year and exports of ethanol were lower but still strong.

According to the latest government statistics, exports of distillers dried grains with solubles (DDGS) totaled a record 9.7 million metric tons (mmt) last year, up 31% from 2012 and well above the previous record of 9.0 mmt set in 2010. China was the leading destination for U.S. distillers grains, taking 46% of the total, with Mexico and Canada a distant second and third.

ethanol-tankerU.S. exports of ethanol totaled 621.5 million gallons in 2013, down from the previous year but still the third-highest annual total on record. Canada was by far the leading export market for the year, receiving 52% of the total. The Philippines ranked second, followed by Brazil, the United Arab Emirates, and Mexico. Meanwhile, U.S. ethanol imports were down 27% from 2012, making the United States a net exporter of 226.3 mg in 2013, roughly a 24% increase over 2012 net exports.

“U.S. produced ethanol is the world’s lowest cost liquid transportation fuel. As such, we anticipate that export opportunities will continue to grow as countries across the globe recognize the air quality, high octane and superior performance of renewable ethanol,” said Bob Dinneen, President and CEO of the Renewable Fuels Association.

U.S. Ethanol Export Opportunities Abound

According to U.S. government data, U.S. ethanol exports surged to 82.4 million gallons (mg) in November, with large volumes finding their way into new or emerging markets such as China and India, as well as the Philippines, Tunisia, Panama, and Mexico.

Total exports were up 54 percent from October, reaching the highest monthly level since March 2012. Canada was once again the leading importer of U.S. product, receiving 28.5 mg in November. The Philippines followed with an annual high of 14.0 mg, while India (8.1 mg), U.S. Ethanol Exports 2013.11Brazil (4.3 mg), and Norway (4.3 mg) were other top destinations. For the first time since 2002, a sizable volume of fuel ethanol was exported to China (3.5 mg). Similarly, Panama imported meaningful volumes of U.S. fuel ethanol (2.0 mg) for the first time since 1992. Tunisia (2.3 mg) and Mexico (1.7 mg) are other relatively new markets that imported U.S. product in November.

Bob Dinneen, president and CEO of the Renewable Fuels Association (RFS), noted that the uptick of exports to China and India is a huge opportunity for the ethanol industry and an indicator that ethanol demand is continuing to expand and grow overseas.

Dinneen commented, “U.S. produced ethanol continues to be the lowest cost liquid transportation fuel on the planet. The fact that rapidly developing countries like China and India are turning to the U.S. for fuel supply is both a reflection of that economic reality and the effort of U.S. producers to look beyond our borders to build demand. The RFA will continue working hard on behalf of American ethanol producers to grow and strengthen our export relationships with these emerging countries even as we continue to expand ethanol usage domestically.”

He also pointed out that there is also a huge overseas market emerging.

RFA has worked with the U.S. government and U.S. ethanol producers to expand trade abroad. Most recently, Ed Hubbard, RFA’s general counsel, led a trade mission to Brazil through the Brazil-U.S. Business Council connecting U.S. ethanol companies with business opportunities in the northern regions of the country.

Additionally, Kelly Davis, RFA’s director of regulatory affairs, joined the U.S. Grains Council on a trade mission last May to South Korea and Japan. She visited Seoul and Tokyo, where she had the opportunity to discuss and promote the trade of ethanol and its co-products, specifically distillers dried grains (DDGS), overseas.

New Facility to Turn Ethanol Byproduct into Bio-Resin

bio-res1A Nebraska-based company has expanded its operation to turn an ethanol byproduct into a bio-based resin additive. Composites World reports Laurel BioComposite LLC held an open house and ribbon cutting ceremony for its new 20,000-square-foot manufacturing facility, which will crank out 7 million pounds annually of its trademarked Bio-Res PE.

Tim Bearnes, CEO of Laurel BioComposite, was on hand to welcome special guests Gov. Dave Heineman, Nebraska State Director Maxine Moul, USDA Rural Development and Mayor Mark Patefield. “We held the event to celebrate some important milestones,” says Bearnes. “It also gave us the chance to thank a lot of people that supported our project from its inception and believe in our future.”

Laurel BioComposite’s mission Bearnes explains is to produce Bio-Res PE products from a renewable resource. “Our product replaces a portion of traditional plastic resins and creates a positive environmental impact by reducing the industry’s reliance on crude oil,” he says. “It remains our goal to cost-effectively manufacture a quality bio-based product. We don’t make the plastic. We make the plastic greener.”

The new production line converts feedstock into a powder for thermoset applications or master batch pellets for use in thermoplastics applications such as injection molding.

A second phase currently underway will expand the company’s annual output to 48 million pounds. The products made from Bio-Res include shipping materials, lawn and garden, agricultural and automotive products.

Quad County Breaks Ground on “ACE” Project

quadcounty13-johnsonQuad County Corn Processors officially broke ground today in Galva, Iowa on its Adding Cellulosic Ethanol “ACE” project. Dozens of local community members joined ethanol industry reps and local politicians to celebrate the milestone that ethanol plant General Manager Delayne Johnson said was four years in the making in the R&D lab.

Delayne explained during his remarks, “With the addition of this new cellulosic process, we will stretch the production capacity of each and every corn kernel that passes through our plant. We will increase our ethanol yields by 6 percent, increase our corn oil extraction three times over, while also creating a higher protein livestock feed. This is value-added agriculture at its best.”

quadcounty13-groundbreakingAs a result of the new process, Johnson noted, the DDGs will be much more similar to a corn gluten meal. It will increase the protein content by about 40 percent.

“The greatest benefactors will be the Galva community, our shareholders, the ethanol industry, and the consumer,” added Johnson. “Investing $8.5 million in our new process will add several jobs here at the plant, allow us to produce more ethanol from the same amount of corn, help us contribute to the nation’s supply of cellulosic ethanol, and will continue to lower prices at the pump for consumers.”

You can listen to Delayne Johnson’s comments here: Delayne Johnson's Opening Remarks

You can view Sandy O’Brien’s reading of Senator Tom Harkin’s comments here or listen to her comments here: Senator Tom Harkin Remarks

You can listen to Delayne’s reading of Iowa Ag Secretary Bill Northey’s comments here: Iowa Ag Secy Bill Northey Remarks

Visit the Quad County Corn Processors “ACE” Groundbreaking photo album here.

ISU Seeks Input on DDGs

cattle eating distillers grainsIowa State University is conducting a survey of livestock producers use of feed-related co-products from ethanol production (distillers grains). The survey is focused on the beef, dairy, swine and poultry sectors. It is being funded by a coalition consisting of the Renewable Fuels Association, the Distillers Grains Technology Council and the Corn Utilization Councils from Iowa, Illinois and Nebraska.

“The feedback gained from the survey will be used to help improve co-product quality, which can help livestock producers with their feed costs and livestock performance,” said Kurt Rosentrater, a professor of agricultural and biosystems engineering, who is leading the effort.

Livestock producers are invited to take the survey online until June 19, 2013.

Ethanol By-Product Officially Non-Hazardous

The ethanol by-product and livestock feed known as distillers dried grains with solubles (DDGS) is now officially recognized as a non-hazardous cargo by the International Maritime Organization (IMO).

bargesThe official IMO classification became final and mandatory under the code of the International Maritime Organization on Jan. 1, 2013, after action by the U.S. Grains Council on behalf of its member organizations like the National Corn Growers Association (NCGA).

“While DDGS have effectively been shipped as a non-hazardous cargo for years now, the final classification by the IMO is an important success which will benefit corn farmers across the country,” said NCGA President Pam Johnson. “This status provides additional assurance that DDGS buyers and producers can access the lower freight rates assessed for non-hazardous cargo. U.S. farmers work diligently to ensure at every point in the process that we continue to provide the stable, consistent, quality product that our export markets expect.”

The classification provides savings in the form of lower freight costs which, in turn, increase the return to ethanol plants producing the high quality feed ingredient. Exports of DDGS from the United States have increased tremendously in recent years.

Corn, Ethanol Industries Drive Rural Economy

Screen Shot 2013-01-08 at 11.36.43 PMAccording to a new study released by the Missouri Corn Growers Association (MCGA), the state’s corn and ethanol industries are adding to the state’s bottom line. The study, conducted by the University of Missouri Commercial Agriculture Program, reported that the corn and ethanol industries injected $12 billion into Missouri’s economy from 2000 to 2011. Each year, the state’s ethanol industry utilizes around 100 million bushels of corn to produce nearly 300 million gallons of ethanol and 825,000 tons of distillers grains, a high protein livestock feed. In 2011, Missouri corn production alone added over $1 billion in value to the state’s economy and together the two industries supported 67,000 jobs.

“This research substantiates the tremendous economic benefits corn and ethanol production bring to Missouri,” said MCMC Chairman Jim Stuever, a corn grower from Dexter, Mo. “They are significant drivers for the state by creating jobs, generating tax dollars and increasing vitality of rural communities.”

Over the 12 years studied, the combined benefits to the state’s economy from the corn and ethanol industries were:

  • $12 billion in economic value,
  • $5.3 billion in labor income, and
  • $2.2 billion paid in local, state and federal taxes.

“This is truly a success story for agriculture and the state of Missouri,” noted MCGA President Rob Korff, a corn farmer from Norborne, Mo. “The state’s ethanol industry was built on the faith and dedication of hardworking farm families and support from state leaders.”

During the 12-year period, the ethanol industry yielded a 6:1 return, a net value of over $600 million, on the state’s investment. According to the study, Missouri’s six majority farmer-owned ethanol plants alone generated the following direct and indirect benefits to the state: $734 million in economic value; $416 million in labor income; and $174 million in local, state and federal taxes.

Dyadic Receives 12th Patent

Dyadic International has received its 12th patent, U.S. Patent No. 8,304,212 entitled “Methods and compositions for degradation of lignocellulosic material”. The patent covers methods and compositions for using enzymes mixtures to convert plant biomass into fermentable sugars for the production of various products. The patent also covers novel combinations of enzymes including those that provide a synergistic release of sugars from plant biomass.

“In developing and selling industrial enzymes, our customers and partners not only benefit from Dyadic’s patented C1 platform technology but also from Dyadic’s fungal strains and technologies based on the Trichoderma fungal organism,” said Dyadic’s President and CEO, Mark Emalfarb. “Dyadic uses these strains to produce specialty enzymes that can be used for a variety of applications in such fields as animal health and nutrition, biofuels and bio-based chemicals. As with our growing portfolio of patents covering the C1 technology, this patent will provide Dyadic, its customers and licensees with additional protection for our Trichoderma-based enzyme mixtures.”

The patent also specifically describes methods of increasing the yield of fermentable sugars from fermentation of dried distillers grains (DDGs) using enzyme mixtures comprising glucoamylase, beta-glucosidase and alpha-arabinofuranosidase. More specifically, it specifically covers Trichoderma-based enzyme mixtures, which significantly and unexpectedly increase the yield of fermentable sugars from DDGs. DDGs are obtained after the fermentation of the starch derived from a number of grains including corn, wheat, barley, oats, rice, and rye and are typically used for animal feed. DDGs are also a byproduct of ethanol production which creates synergies in using enzymes for both biofuels and animal feed applications.

Visiting Farmers See Cattle/Ethanol Operation

A group of 17 farmers from Canada, Honduras, India, Mexico, New Zealand, Philippines, South Africa, Swaziland, United Kingdom, Uruguay, US, Zambia, and Zimbabwe had the chance to visit a livestock operation with an ethanol plant next door.

The annual Global Farmer Roundtable, organized by Truth About Trade & Technology (TATT), makes Couser Cattle Company a regular stop for the international farmers each year. TATT Chairman Emeritus Dean Kleckner, former president of the American Farm Bureau Federation, is a big supporter of ethanol himself. “I’m a believer in ethanol from corn,” said Kleckner during an interview at World Food Prize, where the roundtable is held each year. “The corn that is used for ethanol, a lot of that comes back to farmers in the form of distillers grains.”

Couser Cattle Company owner Bill Couser was instrumental in starting the farmer-owned Lincolnway Energy ethanol plant in Nevada, Iowa, which is located next to his operation so he can take full advantage of using distillers grains as feed for his livestock.

Outlook For The Supply & Demand Of DDGS

Distiller grain production was a hot topic discussed throughout the 2012 Export Exchange. Dr. Bob Wisner, Agriculture Extension Economics at Iowa State University, shared his research on the future of DDGS and what we can expect in the coming years. He also spoke on how this years drought affected DDGS production and it’s long-term affect on our US supply.

“The biofuel industry has expanded extremely rapidly in the last six years. It has become a major feed ingredient domestically and in the international market. Here in the United States it’s marketed in several different forms. We have dried distiller grains, that are dried to 10% moisture. We have a modified distiller grain that is partially dried. We have a wet distiller grain that is especially useful in the beef feeding industry. It gives a higher feed conversion efficiency versus corn than dry distiller grains. We have quite the combination of alternative uses here in the United States that for those of you outside the US are not generally available.”

“This is the first year in the last 17 years that we have seen a significant decline in distiller grain production. That of course is being driven by the severe drought here in the United States.”

In conclusion, Dr. Wisner shared these major things that will determine the supply and demand of DDGS.

  • DDGS production follows ethanol production level and corn cost.
  • Prices as % of corn/sbm price higher than in the past: 105%-108% of corn this winter.
  • Prices for all feeds including DDGS will be extremely sensitive to South American weather in the next 4 months.
  • After the current marketing year, with a return to more normal US crop yields, DDGS supplies will likely resume a longer-term uptrend, but at a slower rate than in the last six years.
  • Risk of US domestic DDGS market saturation is low.
  • DDGS exports likely will be growing competitor with the domestic feed industry.
  • Longer-term future production and use depends heavily on policy issues and fuel prices.
  • Important emerging issue: Will oil removal from DGS impact the value by species?

Listen to Dr. Bob Wisner’s complete presentation here: Dr. Wisner at Export Exchange

You can find photos from this years Export Exchange here: 2012 Export Exchange

World Grain Buyers Get US Producer Perspectives

Grain buyers from around the world in attendance at the 2012 Export Exchange had the opportunity to embrace the US producers perspective on the 2012 crop through a producer panel during the opening general session. Key panelists were Ron Gray, Illinois farmer and Secretary/Treasurer of the US Grains Council, and John Mages, Minnesota farmer and Chairman of the Minnesota Corn Research & Promotion Council.

They shared their personal experiences overcoming the 2012 drought and assured buyers of their fight and passion to raise a consistent and quality product.

Listen to the entire Producers Panel here: Producer Panel at Export Exchange

Following the opening session I took the time to talk with Ron Gray, where he summed up the 2012 corn crop and how farming for him is more than a job, its a personal endeavor.

“For us the 2012 crop started out with all the hope of an extraordinary crop. We planted early, the crop went in very well, emergence was good. Then it didn’t rain. Beginning the second week of May through the first week of August we only had about three inches of total rainfall and because of that our corn crop was severely reduced in production. Our farm probably averaged 50 bushels an acre, which is approximately 1/3 of our normal production. The rainfall did come later and the soybean crop is a fairly good crop, but the corn crop was devastated.”

Listen to my interview with Ron here: Ron Gray Interview

Beyond simply listening to producers, international grain buyers had the opportunity to visit farms across the United States. The goal was to gain information, assess the current US corn crop, explore the availability of other grains such as sorghum and barley, and build relationships leading to future sales.

Many participants expressed a preference for buying US grains due to the consistency and quality of the grain. They also appreciate the transparency and reliability of the US marketing and delivery systems. Clearly price and availability hindered US exports this year, but buyers are looking forward to a better crop next year.

You can find photos from this years Export Exchange here: 2012 Export Exchange

Export Exchange: Bringing Buyers & Sellers Together

The key purpose for the 2012 Export Exchange was for buyers and sellers to meet and establish important relationships. The event sponsored by the US Grain Council and Renewable Fuels Association focused on getting answers, making contacts and building business. During the conference I had the opportunity to talk with Tom Sleight, President & CEO of the US Grains Council, about what this event means for the DDGS and the worlds grain supply.

“What we’re telling customers around the world is how the US producers will be there for them. The US farmers will be there for them now and in the future. Yes, we have droughts, thats a problem we have, but for the future the US has always responded to production challenges with more acres, greater production. Our message to the international community is that the US farmer is there in the international market for keeps.”

“I think out biggest thing is being all around, having boots on the ground, representatives that are selling these grains, bringing the buyers in. That’s what we are doing today with over 200 buyers from around the world. Bringing them in, making contacts and making sales. It is a different kind of business and it takes being there and extending your influence and representing producers interest all around the world. That’s what US Grains Council is doing.”

Listen to my entire interview with Tom here: Tom Sleight at Export Exchange

The US Grains Council also announced the official approval of the Syngenta corn variety MIR 162 Agrisure Vipterra in the European Union. This opens the way for exports of US corn co-products, including DDGS and corn gluten free.

Cary Sifferath, USGC senior regional director based in Tunis, said “This approval is a great success as it opens the window of opportunity for U.S. products, including DDGS and CGF, to enter the EU market. This is especially attractive in big markets like Ireland, Spain, Portugal and the Netherlands. Their ability to import these high-protein feed ingredients is critical at a time of crop shortage in Europe and high prices. Everyone is looking for alternatives,”

You can find photos from this years Export Exchange here: 2012 Export Exchange

Getting Ready for Export Exchange

usgcThe 2012 Export Exchange is coming up next week in Minneapolis, the second event of its kind co-sponsored by the U.S. Grains Council and the Renewable Fuels Association to bring together buyers and sellers of grains and livestock feed, including the ethanol by-product distillers dried grains with solubles or DDGS.

“The Export Exchange is a fabulous opportunity for customers to get together with suppliers internationally,” says RFA president and CEO Bob Dinneen. “We’ll have more than 300 countries represented. There will be users of distillers dried grains from China to Europe to South America. Just about every ethanol producer – or I should say DDGS producer – will be in attendance.”

RFA VP of Research and Analysis Geoff Cooper says about 25% of the distillers grains that have been produced by U.S. ethanol plants in the last several years has been exported. “Last year we shipped distillers grains to more than 50 countries, so it’s really become a huge component of the global feed market,” he said, noting that if the supply of distillers grains was a nation’s corn crop, it would rank as the fourth largest in the world behind the U.S., Brazil and China.

While DDGS output has decreased this year as ethanol production has slowed down as a result of the drought, Cooper says we are still seeing very strong demand for distillers grains because it is priced lower than corn but provides more nutrition and energy value for livestock and poultry.

Domestic Fuel reporter Jamie Johansen will be covering the event and she interviewed both Dinneen and Cooper for a preview. Listen to or download those back to back interviews here: Export Exchange Preview

Study Indicates RFS Waiver Could Increase Feed Prices

On the eve of the deadline for providing comments to the Environmental Protection Agency on the Renewable Fuel Standard (RFS) waiver request, the ethanol industry has released a new study that indicates a waiver could actually increase the cost of feed for livestock and poultry producers.

The analysis, conducted by Cardno-ENTRIX and commissioned by the Renewable Fuels Association (RFA), finds that if a waiver of the RFS resulted in reduced biofuel output, the minor reductions in corn prices would be partially or fully offset by increased prices for other feed ingredients like distillers grains (DDGS) and soybean meal, according to a release from RFA.

“When viewed in the context of changes in the prices for other key feed ingredients such as distillers dried grains with solubles (DDGS) and soybean meal, the change in total net feed costs for livestock, dairy and poultry feeders would either increase slightly or decrease by a negligible amount if a waiver was granted,” according to the study, conducted by economist John Urbanchuk. “This is due to the fact that if a waiver reduced biofuel output, it would also reduce the available supply of DDGS and soybean meal, which would naturally lead to higher prices for those key feed ingredients.”

The analysis shows that if ethanol and biodiesel production were each reduced 500 million gallons in 2013 under a waiver of the RFS, total feed costs would increase 4.1 percent for dairy, 0.8 percent for layers, 0.5 percent for hogs, and 0.2 percent for broilers. For beef cattle, feed costs might fall by just 0.6 percent with a waiver.

These results are corroborated directionally by a recent study by the Food and Agricultural Policy Research Institute (FAPRI) at the University of Missouri. FAPRI found a 1.3 percent reduction in ethanol output under a waiver could lead to slightly higher distillers grains and soybean meal prices. According to FAPRI, “Lower corn price means lower feed costs for livestock producers, unless offset by slightly higher soybean meal and distillers grains prices.”

Cardno-ENTRIX RFS analysis

Thursday, October 11, is the deadline for providing comments to the Environmental Protection Agency on the Renewable Fuel Standard (RFS) waiver request and stakeholders are urged to make their voices heard before the end of the day tomorrow. More information on how to make comments to EPA can be found at