Analyst: Ethanol Industry Has Room to Grow: Exports on Pace to Shatter Last Year’s Record.
by Daniel Grant (FarmWeekNow) The rate of growth for the U.S. ethanol industry may have slowed in recent years, but it’s far from over, according to Bill Holbrook, senior analyst for ProExporter.
Production capacity continues to grow as producers look to overseas markets to export ethanol and one of its key co-products, distillers’ dried grains with solubles (DDGS).
The western Corn Belt added about 1 billion gallons of production capacity the past three years, while the eastern Corn Belt added another 300 million gallons worth of processing capabilities during that time.
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Iowa, Illinois and Nebraska contain more than half of the nation’s ethanol capacity.
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The U.S. can boost domestic ethanol consumption, even as vehicles become more fuel efficient, by boosting the octane level in blends.
But the key growth potential for ethanol sales lies outside the U.S.
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Brazil and Canada are the top two destinations for U.S. ethanol. Sales to China slowed due to the trade war, but sales increased to other countries such as India, South Korea and the Philippines.
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The story is similar for DDGS. Holbrook believes increased production of the feed product has the most potential in the export market. He predicts U.S. exports of DDGS could increase by 50 percent during the next 10 years. READ MORE includes AUDIO
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