Recovery of China DDGS Market Continues

Patriot Renewable Fuels DDGsEthanol exports from the United States dropped in January and while distillers grains (DDGS) exports were also lower compared to December, the Chinese market for DDGS is showing recovery.

According to Renewable Fuels Association (RFA) vice president Geoff Cooper, U.S. ethanol producers exported 68.7 million gallons of ethanol in January, down 9% from December 2014 and the lowest since September 2014. However, “imports barely registered in January, with only 28,670 gallons coming in from Canada.”

On the DDGS side, exports totaled 708,861 metric tons in January, down 3% from December and still down 22% compared to a year ago. But the good news is that China was the top market for DDGS exports, receiving 24% of the total. Recovery of the Chinese market continues, as January exports to China were 35% above December levels and up dramatically from near zero in November.

Ethanol Conference Going Global Panel

nec15-global-panelThe theme of the 20th National Ethanol Conference was “Going Global,” and the title panel featured five international experts to discuss building ethanol demand in new markets.

Moderated by Renewable Fuels Association (RFA) general counsel Ed Hubbard, the panel included Pedro Paranhos of Eco-Energy; Lakeview Energy CEO Jim Galvin; Henrique Pacini of United Nations Conference on Trade and Development (UNCTAD); Mike Dwyer with the USDA’s Foreign Agricultural Service; and Robert Wright with ePure.

Hubbard started off the conversation, pointing out that while the U.S. ethanol industry hit record-breaking levels of ethanol exports to the world – 836 million gallons in 2014 – there’s still room for growth.

“As long as U.S. made ethanol provides a valuable, cheaper and cleaner alternative to petroleum-based gasoline, it will continue to be sought all over the globe. This panel’s goal is to help you identify some opportunities, new and expanded, to address some of the challenges we face as we move forward,” Hubbard said.

Paranhos echoed those sentiments, as he broke down how Brazil has seen its overall ethanol market grow over the last 10 years but has plateaued in the last few. Part of that is some of the same issues U.S. ethanol producers are facing: economics and regulatory, in America’s case, the blend wall. The panel talked about how export markets are helped the most by mandates, which help fuel growth of ethanol. Presenters pointed out that producers need to consider sustainability and environmental factors to meet certain countries’ and regions’ requirements to get into those markets, which also, in turn, return better profits for ethanol plants.

Dwyer told those attending that ethanol has made tremendous global gains over the past few years – impressive when you consider the green fuel had to overcome the “food-versus-fuel” debate and a 54-cent-per-gallon tax on ethanol exports.

“In 2008, when I took over this job, if I had told you that the U.S. would become the world’s largest exporter of ethanol, you would have thought I was drinking that ethanol,” he said, pointing out how while gasoline consumption has dropped in the U.S., it’s growing worldwide, making American ethanol competitive on the global market. “A lot has happened in five years.”

The panel members said, even when you consider where ethanol has been and the obstacles ahead, there still is great potential for growth worldwide.

Listen to the panel’s complete remarks here: NEC 15 Going Global Panel

2015 National Ethanol Conference Photo Album

Former USTR Praises Ethanol for Going Global

nec15-kirkFormer U.S. Trade Representative Ron Kirk was the keynote speaker at the Renewable Fuels Association (RFA) National Ethanol Conference this week where the theme was “Going Global” with an emphasis on exports.

“I want to thank you for your very strong and vocal support for a very smart trade policy for our country over the years,” said Kirk, who served under President Obama in his first term. “You understand the importance of going global.”

Kirk lamented that too many Americans have “gone sour” on international trade, citing a poll that found twice as many Americans said they believe in the existence of UFOs than believed international trade was good for America. “We have got to go out and tell the story of the real benefits of trade,” he said.

Listen to Kirk’s remarks here: Former USTR Ron Kirk at NEC 15

2015 National Ethanol Conference Photo Album

USGC Helped Move DDGS Exports in 2014

usgc-winter-grayThe U.S. Grains Council (USGC) held its winter meeting last week in Costa Rica where more than 250 delegates met to take a look back at last year and assess export opportunities.

Chairman Ron Gray says one of big issues of 2014 was with the ethanol co-product distillers grains (DDGS) and China. “At the end of the year, our exports were one of the highest years for DDGS on record,” said Gray. “The Grains Council was instrumental in mitigating that process so that trade can continue.”

Gray, who is a farmer from Illinois, believes it’s important for producers to be involved in trade policy. “I think combines would be easier to fix than trade policy,” he said. “We try to address the next problem so we can keep trade moving.”

Gray says U.S. sorghum picked up some exports to China last year to pick up the slack caused by the biotech trait issue with corn, which allowed them to remain active in the market, but ultimately it’s the growing demand for corn that is benefiting farmers back home.

RFA: Ethanol Exports Hit Near-Record Levels in 2014

ethanolexports2014Exports of American ethanol hit near-record levels in 2014. This news release from the Renewable Fuels Association (RFA) says U.S. producers sent 836 million gallons of ethanol worth $2.1 billion to international markets. The information is in the RFA’s new publication, “2014 U.S. Ethanol Exports and Imports: Statistical Summary.”

The report finds that U.S. ethanol has made its way to all inhabited continents of the world, reaching more than 50 countries. The top five countries importing U.S. ethanol last year included Canada, Brazil, the United Arab Emirates, the Philippines, and India. Meanwhile, exports to the European Union remain down due to a punitive trade tariff it chooses to impose on U.S. produced ethanol.

Bob Dinneen, president and CEO of the Renewable Fuels Association, noted, “Last year U.S. ethanol producers produced a whopping 14.3 billion gallons of ethanol and nearly 6 percent was exported globally. We are working diligently to increase demand for this product abroad. It has been rewarding to see countries all over the world embrace the U.S. produced, high-octane fuel, which has also been the lowest-cost liquid transportation fuel found anywhere in the world.”

Dinneen continued, “U.S. ethanol is now exported to 51 countries across the globe, including regions that once seemed far-fetched as renewable fuel destinations such as the Middle East and North Africa. But, we will not stop here. We will keep working with others in the industry and the U.S. government to keep exploring new regions that would benefit from U.S. ethanol. Last year, RFA participated in trade missions to Panama, China, Peru, Japan, and South Korea and we will keep at it until all countries understand the value of U.S produced ethanol.”

The report also shows ethanol imports into the U.S. are down, reaching the second-lowest levels.

China Approves Imports of Biotech Corn

syngentaSyngenta announced today that it has received approval for the Agrisure Viptera® trait (event MIR162) from China’s regulatory authorities, formally granting import approval. The approval covers corn grain and processing byproducts, such as dried distillers grains (DDGs), for food and feed use.

The Agrisure Viptera® trait is a key component of Syngenta’s insect control solutions, offering growers protection against the broadest spectrum of above-ground corn pests and enabling significant crop yield gains. Agrisure Viptera® has been approved for cultivation in the USA since 2010 and has also been approved for cultivation in Argentina, Brazil, Canada, Colombia, Paraguay and Uruguay.

Syngenta originally submitted the import approval dossier to the Chinese authorities in March 2010. In addition to China, Agrisure Viptera® has been approved for import into Australia/New Zealand, Belarus, the European Union, Indonesia, Japan, Kazakhstan, Korea, Mexico, Philippines, Russia, South Africa, Taiwan and Vietnam.

China May Reopen Market for U.S. DDGs

distillers_grains_ Photo US Grains CouncilNews out this week that Chinese officials committed to Agriculture Secretary Vilsack that the ban on imports of U.S. distillers grains (DDGs) containing the MIR 162 trait will be dropped is being met with optimism by the ethanol industry.

“While we are still awaiting the official regulatory announcement from China regarding the approval of this policy, it is welcome news for America’s ethanol industry,” said Growth Energy CEO Tom Buis. “I would like to personally thank Secretary Vilsack for his leadership and steadfast commitment to ensuring a resolution to this issue. Additionally, the many hardworking professionals of the USDA and the USTR deserve praise for their dedicated work behind the scenes and for their persistence in working with their Chinese colleagues to re-establish market access for U.S. DDGs.”

“China has always been somewhat schizophrenic with our protein feed,” said Renewable Fuels Association (RFA) president and CEO Bob Dinneen in an interview today. “There are times when they desperately want it and can’t get enough of it, there are times when they will erect these mysterious trade barriers so that we can’t get our product in there … We think we may be getting through it now.”

According to the office of the U.S. Trade Representative
, one of the outcomes of the U.S.-China Joint Commission on Commerce and Trade meetings was in the area of agricultural exports related to biotechnology traits. “China announced that it would approve the importation of new biotechnology varieties of U.S. soybeans and corn ­… and also that it would pursue a regular dialogue with the United States focused on the benefits of the increased use of innovative technologies in agriculture, for both the United States and China.”

Growth Energy Staffer on Advisory Committee

growth-energy-logoU.S. Secretary of Commerce Penny Pritzker has appointed Jim Miller, Growth Energy’s Vice President and Chief Economist, to a position on the Department of Commerce’s Renewable Energy and Energy Efficiency Advisory Committee. The departmental committee was established to advise the Secretary on programs and policies to expand U.S. renewable energy and energy efficiency exports.

“This is a wonderful opportunity to help increase awareness of the importance of renewable fuels as well as expand markets across the globe to help export clean, sustainable energy that will help create jobs right here at home, while improving the environment around the globe and reducing the world’s dependence on fossil fuels,” said Miller.

Miller previously served as the Senior Policy Advisor on the Budget Committee under Senator Kent Conrad (D-N.D.). Prior to his service on Capitol Hill, Miller was appointed by President Obama and confirmed by the U.S. Senate to serve as the Under Secretary for Farm and Foreign Agriculture Services at the U.S. Department of Agriculture.

Also appointed to the committee was Kelly Davis of the Renewable Fuels Association.

RFA’s Davis Appointed to Advisory Committee

Renewable Fuels Association (RFA) Director of Regulatory Affairs Kelly Davis has been appointed to the Department of Commerce’s Renewable Energy and Energy Efficiency Advisory Committee.

According to Secretary of Commerce Penny Pritzker, the function of the committee is to “provide consensus advice on the development and administration of programs and policies to expand U.S. renewable energy and energy efficiency exports.”

“It is truly an honor to be selected by Secretary Pritzker to serve on the Renewable Energy and Energy Efficiency Advisory Committee,” said Davis. “I look forward to having a seat at the table and helping Secretary Pritzker ensure that our global trading partners understand and appreciate the benefits of U.S. produced ethanol in reducing consumer gasoline prices, improving energy diversity and security, and addressing climate change.”

Davis recently participated in a trade mission to China, led by USDA Under Secretary Michael Scuse, to promote U.S. ethanol and co-products and strengthen the trade relationship between the two countries. Last year, she joined a similar trade mission, led by the U.S. Grains Council, to South Korea and Japan. The RFA board of directors has made opening new markets for ethanol and distillers dried grains with solubles (DDGS) abroad a top priority, and Davis’ appointment to this prestigious advisory committee reflects that commitment.

Export Exchange Tours Build Relationships

badger-visitMany of the international teams visiting the United States last week for the 2014 Export Exchange also participated in tours before and after the event to see ethanol plants and farms across the Midwest.

Badger State Ethanol in Wisconsin had the honor of hosting a team of buyers from the Kingdoms of Saudi Arabia and Jordan. The KSA/Jordan team included companies representing the major dairy and poultry companies and major importers of feed grains in both countries and have been buyers of DDGS in the last couple of years.

exex-bob-tomHeld every other year by the U.S. Grains Council (USGC) and the Renewable Fuels Association (RFA), Export Exchange brings together more than 200 international buyers with U.S. sellers of corn, sorghum, barley, distiller’s dried grains with solubles (DDGS), corn gluten meal and corn gluten feed. Over the course of three days of events and the pre- and post-tours, these individuals not only do business directly but also make connections to facilitate future sales.

“This year’s Export Exchange was a resounding success,” said RFA president Bob Dinneen, pictured here with USGC president Tom Sleight. “In addition to new business agreements, it is my hope that attendees from all across the world will return home with a better understanding of international grain markets, domestic supply and demand of DDGS and coarse grains, and the current political landscape.”

RFA Promoting Distillers Feed at Export Exchange

rfa-exex-2014The 2014 Export Exchange is continuing today in Seattle, Washington with representatives from more than 50 different countries in attendance to learn more about DDGS, the distillers feed product produced by U.S. ethanol plants.

The Renewable Fuels Association (RFA) is co-sponsor of the event with the U.S. Grains Council and RFA president and CEO Bob Dinneen says it’s because we produce a lot of distillers feed. “Our plants, if they were a single country, would be the fourth largest producer of corn equivalent feed, behind only the U.S., China and Brazil,” said Dinneen, who spoke at the event yesterday on agricultural policies and politics. Interview with RFA CEO Bob Dinneen at 2014 Export Exchange

rfa-cooper-exexRFA Senior Vice President Geoff Cooper spoke at the event on the supply and demand outlook for DDGS.

“We have ample supplies of distillers grains coming from the U.S. ethanol industry but the demand picture is somewhat murky,” said Cooper. “That murkiness has to do with trade barriers and interruptions in the global trade of distillers grains that we’re seeing.”

Cooper says the U.S. is expected to produce 36-37 million metric tons of DDGS in the current marketing year, but one of the biggest trade disruptions in the market is being created by China’s demand that shipments of distillers grains must be certified to be free of the MIR162 biotech corn trait. “That kind of certification is not possible,” said Cooper. “So, we expect exports to China to be significantly curtailed or even halted until this situation is resolved.”

Last year, half of the U.S. distillers grains exports went to China, but Cooper says there are other countries increasing imports. “We are seeing continued growth of distillers grains exports to other parts of Asia outside of China,” he said, adding that Mexico is increasing imports and countries such as Egypt and Turkey are also growing markets. Interview with RFA Senior VP Geoff Cooper at 2014 Export Exchange

Ethanol Report with New RFA Chairman

ethanol-report-adRandall Doyal, General Manager and CEO of Minnesota-based Al-Corn Clean Fuel, is the new Chairman of the Board of Directors for the Renewable Fuels Association (RFA).

rfa-doyal-1Doyal’s plant located in Claremont, Minnesota opened in 1996 and now produces 50 million gallons annually. In this interview, he talks about some of the challenges and opportunities facing the ethanol industry in the immediate future. Challenges include the lack of certainty surrounding the Renewable Fuel Standard (RFS) and railway transportation problems, while the importance of ethanol as a higher octane fuel and increasing exports are rising opportunities.

Ethanol Report with New RFA Chairman

Ethanol Report on 2014 Export Exchange

ethanol-report-adComing up October 20-22 is the 2014 Export Exchange sponsored by the Renewable Fuels Association (RFA) and the U.S. Grains Council (USGC) to bring international coarse grain buyers and U.S. suppliers together, with a particular focus on the ethanol co-product distillers dried grains with solubles – better known as DDGS or distillers feed.

2014-export-exchangeThis edition of the Ethanol Report features comments from RFA president and CEO Bob Dinneen, USGC president and CEO Tom Sleight, and industry relations director Lyndsey Erb-Sharkey.

Ethanol Report on 2014 Export Exchange

USGC Lists Top 10 Markets for US Ethanol

The U.S. Grains Council (USGC) has compiled its top 10 list of potential U.S. ethanol markets for the upcoming 2014/2015 market year, starting September 1.

usgc-ethanol-mkts1

While Brazil and Canada remain the top two, the Council is assessing Japan and Korea, Latin America and Southeast Asia as potential markets for U.S. ethanol exports. In the number three spot, USGC believes Japan has the potential to import 459 million gallons of U.S. ethanol in the year ahead, which would account for 11 percent of global demand for U.S. ethanol. Seventh placed Mexico has the potential to import 236 million gallons of U.S. ethanol and the Philippines at number nine could import 90 million gallons. Those three markets combined could to represent almost 20 percent of global demand for U.S. ethanol.

Rounding out the top ten, USGC puts the United Kingdom in fourth place with nearly 305 million gallons, India and Nigeria ahead of Mexico in 5th and 6th place with 250 and 240 million gallons respectively. Australia is ranked in 8th place with 220 million gallons and the Netherlands completes the top 10 with just over 86 million.

Colombia has Potential as Distillers Grains Market

COLOMBIAExports of U.S.corn to Colombia have soared this year, thanks to bigger crops, lower prices, and a favorable free trade agreement. The U.S. Grains Council (USGC) also sees great potential for increasing exports of the ethanol co-product and livestock feed distillers grains (DDGS).

“We currently see about 90,000 metric tons of distillers grains moving into Colombia,” says USGC Director of Global Strategies Kurt Shultz. “We believe the market has the potential to easily exceed 700,000 tons, so there’s a lot of upward opportunity in Colombia for increased exports of distillers grains.”

Under the free trade agreement, there are no duties on distillers grains, so the Grains Council is actively working to bring technical knowledge on how to use the product to the region. “We had some feeding trials last year with the dairy industry which should good acceptance in the dairy sector,” said Shultz. Now they are looking at doing trials in swine and poultry as well.

This will likely be a topic of discussion at the 2014 Export Exchange coming up October 20-22 in Seattle. The event, co-sponsored by USGC and the Renewable Fuels Association, brings together buyers and sellers of distillers grains in an effort to expand established export markets and develop new markets. Discounted early registration for the event is available now through September 22.