China’s Ethanol Love May Be Antidote for Slumping U.S. Farms
by Mario Parker (Bloomberg) Producers hopeful Chinese ethanol purchases are coming next; Biofuel, made from corn, helps support farm-belt growth — A little love from China in the U.S. ethanol market during the trade-war detente between Washington and Beijing could go a long way in soothing the ailing American farm economy.
That’s according to Mark Marquis, chief executive officer and co-founder of closely held Marquis Energy LLC, a Hennepin, Illinois-based producer that operates the world’s largest dry mill ethanol plant. His company shipped one of the last cargoes of U.S.-made ethanol to China in April, just as the spat between President Donald Trump and his counterpart President Xi Jinping deepened.
Since then, China’s retaliatory tariffs choked off demand and contributed to a slump in the ethanol industry that’s squeezed margins and forced output cuts.
While duties on U.S.-grown soybeans and pork have received the lion’s share of attention, the Asian country has 70 percent tariffs on American-made ethanol, mostly made from corn in the Midwest. There are also fees on a byproduct known as dried distillers grains, which is fed to livestock. The biofuel is a key component of the farm-belt economy, …
…
Without the return of Chinese demand, things for the U.S. ethanol industry go from bad to dire, according to Marquis, who runs a 300 million-gallon-a-year plant near the Illinois River. He’s (Geoff Cooper, president and CEO of the Renewable Fuels Association) heard of as many as eight plants that have shut down amid the poor margins, with “maybe two or three more coming.”
…
He added that the U.S. also faces trade barriers in Europe, Brazil and Peru. READ MORE
CHINA COULD PLAY BIG ROLE IN IMPROVING U.S. ETHANOL MARGINS (Brownfield Ag News)
UPDATE 6-U.S., China can reach trade deal ‘we can live with’ -U.S. Commerce secretary (Reuters)
