Farm Futures: Biofuels Face Uncertainty after Record Year

February 05, 2025

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by Bruce Blythe (Farm Progress) Ethanol exports hit new highs and soy oil use for biofuels reached record levels in 2024. Farmers now eye red flags amid changing demand patterns and policy uncertainty. --- After a blockbuster 2024 for U.S. biofuels, the new year brings a few bothersome questions for the industry, including: Can this momentum be sustained?

First, a few numbers worth noting:

U.S. ethanol exports set an annual record in 2024 at 1.72 billion gallons shipped through November.
Soy oil use for biofuels was forecast to be a record.
Corn for ethanol was near its second-highest level ever.

Still, potential warning signs loom, with biodiesel use expected to drop 17% in 2025, according to a recent forecast by the Energy Information Administration.

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“Although the ethanol demand for corn is strong, it’s showing signs of softening as ethanol margins weaken from rising corn and natural gas prices,” CoBank analysts said in a January report. Ethanol production appears to have stalled while stockpiles increase seasonally. READ MORE

Related articles

US ethanol exports — fueled by Nebraska — hit record in 2024, but tariffs pose concern (KLKN; includes VIDEO)
Ethanol export uncertainties in 2025 (Brownfield Ag News)
RFA Analysis Shows Ethanol Industry Made Strong Contribution to the U.S. Economy in 2024 (Renewable Fuels Association)
Ethanol industry makes $23B in corn purchases and 'robust' contributions to economy, says report (MIchigan Farm News)

Excerpt from KLKN: With the possibility of trade wars on the horizon, it could impact several industries, including ethanol, which just had a record year.

According to the Renewable Fuels Association, the value of the U.S ethanol industry’s exports rose to a peak of $7.5 billion in 2024, fueled by a record 1.91 billion gallons exported.

Nebraska is one of the biggest contributors to those exports.

Representatives of both the Nebraska Farm Bureau and the Nebraska Ethanol Board said Friday that although we’re the No. 2 ethanol-producing state, we actually don’t use much of it.

We send it elsewhere, but if a trade war were to happen, that could change.

“You can see why the ag sector gets a little nervous and gets a little anxious as we start talking about tariffs and trade,” said Mark McHargue, president of the farm bureau. “That might limit our ability to both sell and buy goods from our some of our neighbors and around the world.”

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Mexico is the top destination, so a trade war with that country could have a big impact on Nebraska’s economy.

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President Donald Trump this week paused his plans for tariffs on Mexico for 30 days, so the ethanol board will use that time to reassess.

“I always like to just to make sure that people know that these trade relationships, especially for a place like Nebraska with a global presence and a global impact, is just so important,” Wagner said. READ MORE; includes VIDEO

Excerpt from Brownfield Ag News: The vice president of government affairs for the Renewable Fuels Association says there could be some uncertainty for ethanol exports this year.

Ed Hubbard says he’s concerned about the country’s trading relationships with Canada and Mexico amid ongoing tariff threats from the Trump administration. “It certainly makes us nervous. Mexico is our largest market for distillers grains and Canada is our largest market for ethanol exports by leaps and bounds.”

He tells Brownfield it will be important to maintain key markets in Latin America and Southeast Asia. “The Trump trade strategy, at least from the conversations we’ve heard, does provide some optimism as it relates to some of our challenges. We just don’t want to have to see some of our key markets disappear.”

Hubbard says a trade war could be problematic for the biofuels industry. READ MORE; includes AUDIO

Excerpt from Renewable Fuels Association:

The ethanol industry’s contribution to the U.S. economy remained “robust” last year, as record-setting production offset the impact of lower commodity prices, according to an analysis released today by the Renewable Fuels Association.

In 2024, the industry directly supported 56,000 U.S. jobs, along with an additional 258,000 indirect and induced jobs across all sectors of the economy. The industry created $28.3 billion in household income, contributed $53 billion to the nation’s gross domestic product, and generated more than $10 billion in tax revenues at the federal, state and local levels. Returns over operating costs averaged an estimated $0.26 per gallon, 40 percent lower than the average operating margin in 2023.

“Our nation’s ethanol producers worked overtime in 2024 to set a new production record and ensure American families could enjoy the benefits of a cleaner, lower-cost domestically produced fuel option,” said RFA President and CEO Geoff Cooper. “And they are excited about the opportunities that lie ahead this year, with a renewed focus on American energy security and bolstering the farm sector.”

Cooper stressed 2024 was also a year that saw record ethanol exports of 1.91 billion gallons to countries around the world, with exports alone supporting 11 percent of the industry’s employment. Domestic consumption also increased slightly over 2023’s levels.

The 2024 economic impact report also shows that the industry spent $30 billion on raw materials and other goods and services to produce ethanol last year. Corn purchases alone accounted for $23 billion, as the industry continued to support America’s farming communities.

“The use of ethanol has multiple benefits, including enhancing America’s energy security, supporting agricultural markets, and cutting emissions of greenhouse gases and tailpipe pollutants,” the report concludes. “The industry’s significant economic impact is apparent to those involved in ethanol production and the agriculture sector, and it has been felt most profoundly in rural America. And the industry’s contribution can continue to grow, given the increasing availability of mid- and high-level blends, prospects for further development of export markets, and new uses such as sustainable aviation fuel on the horizon.”