USDA Under Secretary Bullish on Ethanol

by Cindy Zimmerman (Energy.AgWired.com) As China announced a suspension of its ethanol mandate last week, Under Secretary of Agriculture for Trade and Foreign Agricultural Affairs Ted McKinney said he remains bullish on expanding exports for the fuel, despite the trade challenges.

“Ethanol is one of the most needed products around the world, but for some doggoned reasons, continues to be held out,” said McKinney, during an interview Friday at the Southeast Regional Fruit and Vegetable Conference. “But I am still bullish.” McKinney said China, Mexico and India offer the best opportunities for increasing ethanol exports. READ MORE includes AUDIO

Excerpt from Brownfield Ag News: “I do believe China will buy corn and corn-related products, like ethanol and distillers grains,” says University of Illinois ag economist Todd Hubbs.

Hubbs also expects China to buy U.S. ethanol despite recent reports they have suspended their E10 ethanol mandate.

“It could be relatively strong. We’ve seen them do as much as 200 million gallons before in a marketing year—and I think we could see them at least get 100 million gallons,” he says.

Hubbs says he’s skeptical China will be able to reach the 40 billion dollar purchase level being discussed by the Trump Administration, but adds, “If they’re going to hit 16 billion above 24 billion, I think corn and corn-related products are going to be in the mix.” READ MORE

Excerpt from Ethanol Producer Magazine: Representatives of the U.S. ethanol industry have also weighed in on the deal.

The American Coalition for Ethanol called the agreement a step forward, but cautioned that significant ethanol market constraints remain. “Phase one represents a positive step in the right direction, especially once we have evidence that China has made actual purchases of U.S. ethanol and distillers grains, but given ongoing export and domestic market constraints, there is much more work to do,” said Brian Jennings, CEO of ACE.

“The signing of this partial trade deal with China doesn’t erase the pain still being felt at home due to the artificial lid EPA’s mismanagement of the Renewable Fuel Standard has placed on domestic ethanol demand,” Jennings continued. “Further, today’s trade agreement follows reports that China suspended its plan to implement an E10 nationwide mandate this year, raising more uncertainty for the industry. We remain hopeful the next phase of talks with China can conclude with the restoration of a robust and enforceable trade relationship.”

The Renewable Fuels Association hailed news of the agreement. “We are very optimistic about the potential of this agreement for American agriculture and the renewable fuels industry—with the inclusion of ethanol and key co-products like distillers grains—and are looking forward to more specific details on the agreement,” said Geoff Cooper, president and CEO of the RFA. “America’s ethanol producers have experienced significant economic losses due to punitive Chinese tariffs on our products, and we are eager to return to a more open trading relationship with China. Chinese consumers understand that using ethanol can lower fuel prices and help address major air quality concerns in urban areas across the country. In addition, the ethanol industry’s animal feed co-products are an economical source of nutrition for China’s livestock and poultry sector.

“We hope this deal reopens the door immediately for meaningful exports of both ethanol and feed co-products to China, and we thank President Trump, the U.S. Trade Representative, and U.S. Department of Agriculture for their efforts to reopen the Chinese market to U.S. agricultural and energy products,” Cooper continued. “And like President Trump in his remarks right before the signing, we also appreciate the hard work of Sens. Chuck Grassley, Joni Ernst and Deb Fischer as true champions for ethanol.”

Growth Energy called the agreement a positive step forward. “The signing of the Phase One trade agreement with China today is another positive step towards restoring market confidence for U.S. biofuel producers,” said Emily Skor, CEO of Growth Energy. “We’re grateful to U.S administration officials for their continued work on securing this trade agreement at such a pivotal time for our nation’s agriculture and renewable energy industries. Breaking down trade barriers between our nations will provide a valuable opportunity to restore demand for American biofuel, and we hope to soon see biofuels and DDG exports back on the Chinese market.” READ MORE