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.

Export Opportunities for Ethanol and DDGs

U.S. exports of ethanol totaled 59.9 million gallons (mg) in June, up 13% from the seven-month low in May, according to a Renewable Fuels Association (RFA) analysis of government data, and the opportunities are expanding.

ace14-geneThat was the topic for the last session at the American Coalition for Ethanol conference this week in Minneapolis and one of the speakers was Gene Griffith of Patriot Renewable Fuels in Annawan, Illinois.

“U.S. ethanol is the cheapest motor fuel in the world, it’s needed and it can be blended in any country for clean air,” said Griffith, noting that the industry will continue to grow and produce more than we need in the country. “We must develop these worldwide markets. It’s not just Brazil, it’s not just the United States, there’s a lot of countries around the world that need our DDGs and our low cost, clean burning fuel.”

Listen to Gene explain in detail here: Gene Griffith, Patriot Holdings, on ethanol exports

ace14-chsClayton Haupt with CHS Renewable Fuels Marketing discussed China import issues with distillers grains, noting that the game has changed considerably since he was asked to do this talk in June.

July 24, it was announced you have to have a government stamp that has to say (DDGS imports are) clean of all GMO traits not approved in China,” said Haupt, noting that the U.S. Grains Council responded that simply cannot be done. “You’re kind of put in an environment today that you’re probably not going into China.”

Listen to Haupt’s presentation here: Clayton Haupt, CHS Renewable Fuels Marketing

ace14-ecoenergyLastly, Chad Martin with Eco-Energy wrapped up with an overall look at export markets.

“Ethanol demand is no longer driven solely by the U.S. blender,” said Martin. “That’s obviously a good thing but it comes with some complexities in terms of import quotas, different specs, different market factors to be considered…things our industry has never really had to focus on until we started exporting both distillers grains and ethanol.” Chad Martin, Eco-Energy

27th Annual Ethanol Conference photo album

Grains Council Working on Ethanol Exports

usgrainscouncil1The U.S. Grains Council (USGC) is working on promoting exports of U.S. ethanol through a partnership between USDA’s Foreign Agriculture Service, Growth Energy and the Renewable Fuels Association (RFA).

“We’ve been working since late March, early April to determine which markets we’re going to do market assessments in and then next year we’ll shift into market development activities,” said Ashley Kongs, USGC manager of ethanol export program. The Grains Council is planning three regional market assessment programs this year, going to Japan and Korea in September, Latin America in November, and southeast Asia in early December.

Earlier this year, USGC participated in a trade mission to China with USDA Undersecretary Michael Scuse where they were able to discuss the possibility of ethanol exports to that country. “They visited with a Chinese ethanol plant and they had meetings with the National Energy Administration in China,” said Kongs. “Currently ethanol can only be sold in six designated markets in China for blending with fuel, but the group had discussions about the possibility of expanding ethanol use nationwide.” Kongs says while there are challenges in the Chinese market, the Grains Council sees great potential for the future to open the door for U.S. ethanol exports.

USGC continues to build on its success in promoting exports of the ethanol co-product distillers grains and will be again this year joining RFA in hosting the Export Exchange, an international trade conference focused on the export of U.S. coarse grains and ethanol co-products held every two years. Early registration for the event is open until July 31 and USGC and RFA members are eligible for discounted pricing.

Export Exchange 2014 Registration Open

2014-export-exchangeRegistration is now open for Export Exchange 2014™, an international trade conference focused on the export of U.S. coarse grains and ethanol co-products.

Approximately 300 U.S. suppliers and agribusiness representatives and more than 180 international buyers are expected to attend Export Exchange 2014. The conference is being held Oct. 20-22 at the Sheraton Seattle Hotel and is co-sponsored by the U.S. Grains Council (USGC) and the Renewable Fuels Association (RFA).

“Export Exchange brings together a group of U.S. suppliers and international buyers in a unique event focused on the expansion of established export markets and the development of new markets for U.S. coarse grains, distillers dried grains with solubles (DDGS) and other ethanol co-products,” said USGC Chairman Julius Schaaf.

“Over the past decade, the U.S. ethanol industry has emerged as a major producer of high quality animal feeds like DDGS and corn gluten feed,” said Bob Dinneen, RFA president and CEO. “Export Exchange is the premier forum for connecting the producers and marketers of those co-products with customers around the world.”

Export Exchange is held every two years. The 2012 event broke records in attendance and attracted buying teams from 33 countries, including all of the top U.S. international coarse grains and ethanol co-products markets. Attendance at this year’s event is expected to set a new record, creating more opportunities for U.S. merchandisers to connect with buyers and build business.

Early registration discounts end July 31. USGC and RFA members are eligible for discounted pricing and should identify themselves as such at the time of registration.

Ethanol Groups Participate in China Trade Mission

RFANewlogoU.S. Department of Agriculture (USDA) Under Secretary for Farm and Foreign Agricultural Services Michael Scuse led a mission to promote U.S. agricultural exports in northeast China May 5-13. The mission is part of President Obama’s “Made in Rural America” export and investment initiative, designed to help rural businesses and leaders take advantage of new investment opportunities and access new customers and markets abroad.

growth-energy-logoTaking part in the mission to promote U.S. biofuels and co-product exports was Renewable Fuels Association (RFA) Director of Regulatory Affairs Kelly Davis and Jim Miller with Growth Energy.

During a press conference Tuesday to talk about the trade mission, Davis said it was her first trip to China and she was astounded by the number of cars on the roads and sees a great need for both biofuels and distillers grains for livestock feed in that country. Miller added that China provides an excellent market opportunity for the U.S. ethanol industry.

Also taking part in the trip and the press conference was Roger Johnson, president of the National Farmer’s Union. Ethanol Press Conference Opening Remarks

New Record Distillers Grains Exports

Distillers grains exports set a new monthly record in March, while U.S. ethanol exports rebounded from the previous month, according to the latest numbers.

distillers-grainsThe Renewable Fuels Association (RFA) reports that March exports of U.S. distillers grains, which is the animal feed co-product from dry mill ethanol plants, were a record 1.16 million metric tons. March shipments were up 28% from February and topped the one million mark for just the fourth time in history. China accounted for half of the export shipments, with Mexico and South Korea taking the second and third place slots. Year-to-date, distillers grains exports as of March totaled 2.97 million metric tons, a 65% increase over the same period a year ago, putting the U.S. on pace to export a record 11.9 million metric tons this year.

At the same time, total U.S. ethanol exports, including both denatured and undenatured, were 84.0 million gallons in March, up 25% over February and just slightly below the January total of 86.2 million gallons. Canada and Brazil were top destinations in March, with both the Philippines and Nigeria re-entering the market. Meanwhile, U.S. ethanol imports totaled just 5.3 million gallons in March, making the United States a net exporter by a wide margin for the seventh straight month.

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.

Analysis: Export Market a Bright Spot for US Ethanol

Ethanol producers might be fretting about the government’s proposal to lower the amount of the green fuel to be mixed into the Nation’s fuel supply. But this analysis from the University of Illinois points out that those Renewable Fuel Standard (RFS) numbers don’t matter when it comes to ethanol going over the border and to foreign shores, a bright spot for the American industry.

An important point to note is that ethanol or other biofuels produced in the US and exported for consumption overseas do not count toward the blenders’ RFS obligations. The Renewable Identification Numbers (RINs) associated with exported biofuels are retired and no longer eligible for use towards RFS compliance. Thus, exports are not substituted for domestic consumption but rather represent additional demand. Ultimately, exports provide a path around, rather than through, the ethanol blend wall by allowing the domestic industry to produce greater volumes of ethanol than the blend wall limitation implies for domestic use.
ethanolexports
The analysis goes on to look at markets for American ethanol in Brazil, Canada, the European Union, Mexico and other foreign consumers and how it could take up the amount proposed to be lowered in the RFS.

Ethanol Exports Important to Industry

nec14-patriot-juddExports of both ethanol and the animal feed co-product distillers dried grains (DDGs) are important for Patriot Renewable Fuels, located near the Quad Cities and not far from Chicago.

Patriot commodity manager Judd Hulting attended a trade mission with the U.S. Department of Commerce and the Renewable Fuels Association (RFA) to Brazil last fall. “It’s just another outlet for our 200 or so investors,” he says. “We are actually close to 100% dependent on the export market for our distillers grains so branching out both in the ethanol and the DDG market is very important for our profitability going ahead.” Interview with Judd Hulting, Patriot Renewable Fuels

nec14-hubbardRFA General Counsel Ed Hubbard led that mission to Brazil last fall and talked about it during a panel at the National Ethanol Conference on Expanding the Global Marketplace for U.S. Ethanol.

“We had a very successful mission opening new business for individuals that participated,” said Hubbard. “We are the global leader in ethanol production, producing 57% of the world’s output.”

Hubbard noted that U.S. ethanol exports surged to 82.4 million gallons 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. Ethanol exports totaled 621.5 million gallons in 2013, the third-highest annual total on record. Comments from RFA General Counsel Ed Hubbard

Also on the export panel were:

Eco-Energy CEO Chad Martin – Comments from Chad Martin, Eco-Energy
DATAGRO Consulting president Plinio Nastari – Comments from Plinio Nastari, DATAGRO
U.S. Department of Commerce trade specialist Cora Dickson – Comments from Cora Dickson, US Commerce Dept.

2014 National Ethanol Conference Photo Album

NEC Coverage sponsored by Patriot Renewable Fuels LLC

NEC Global Ethanol Conversation

nec14-globalIt is always interesting to hear the perspectives of different countries during the National Ethanol Conference global panel and to see the similarities as well as differences in viewpoint.

The panel was moderated by Bliss Baker, Global Renewable Fuels Alliance, and included Renewable Fuels Association president Bob Dinneen, as well as (from left to right): Joel Velasco, Senior Advisor to Board of UNICA; Scott Thurlow, President, Canadian Renewable Fuels Association; Jayant Godbole, President and Director PRAJ Americas, Inc.; and Robert Vierhout, Secretary-General, ePURE

nec14-epureA few years ago, it was Brazil and the United States sparring with each other over ethanol trade and tariffs, but now it is the Europeans who are challenging the U.S. ethanol industry in the export arena.

“The real loser in the EU’s nonsensical action is the European consumer, who is being denied access to low cost high performance renewable fuels,” Dinneen said in his state of the industry address. Vierhout challenged that assertion on the panel. “Bob, please wake up,” said Vierhout. “If you would export your ethanol to Europe, who’s going to gain? Not the consumer, it’s the oil companies.”

Even Brazil and Canada fired back at Vierhout over Europe’s policy. “I’ll summarize for Rob,” said Velasco. “He’s never met a gallon, or a liter, or hectoliter, of ethanol imports that he likes.”

Thurlow questioned how this would play in the current European-U.S. trade negotiations. “I don’t see how your position can be tenable, Rob, if you are going to have a dispute resolution mechanism that will basically make it impossible for these types of ‘snap-back tariffs’ to be put on,” he said. To which Vierhout replied, “There’s still a possibility (the trade agreement) will exclude ethanol.”

Listen to the conversation here and watch the European exchange on video below: Growing Global Ethanol Industry Panel Discussion

2014 National Ethanol Conference Photo Album

NEC Coverage sponsored by Patriot Renewable Fuels LLC