Ethanol production and corn usage dropped in 2020 US

Ethanol production and corn usage dropped in 2020 US

Ethanol production in the United States dropped 11.7% in 2020, while corn use for ethanol dropped 10%, as COVID-19 slowed demand for the renewable fuel.

Year-end data from the US Energy Information Administration (EIA) showed US ethanol production fell to 13.93 billion gallons or 11.7%, from 2019. It was the lowest production level since 2013, said the Renewable Fuels Association (RFA).

At the same time, corn usage for this purpose dropped 10% from 2019 to 4.78 billion bushels, the US Department of Agriculture said.

EIA data showed that domestic ethanol consumption was down 13.2% from 2019, and the lowest since 2009. Gasoline consumption in the United States was down 13.5%.

The implied ethanol blend rate rose slightly to a record 10.23%, the RFA said. On a monthly basis, the blend rate slumped to 9.05% in April. However, by November and December, the blend rate rose to record highs of 10.78% and 10.81%, respectively, as petroleum prices rebounded.

“While the COVID pandemic, Saudi-Russia oil price war, and trade disputes presented major marketplace obstacles throughout 2020, the US industry showed its resilience and determination,” said Geoff Cooper, president, and chief executive officer of the RFA. “Despite the drop in annual production and domestic blending, ethanol’s share of the gasoline pool strengthened at the end of the year as RIN prices continued to rebound and the RFS returned to the demand-driving force it was intended to be by Congress. Meanwhile, US exports were relatively buoyant, especially when export barriers and the impact of the pandemic on global fuel consumption are considered.”

The EIA estimated fuel exports at 1.34 billion gallons, a decline of 8.5%. Exports were fairly strong to start the year but then were affected by a combination of trade barriers and pandemic-related declines in fuel consumption in key markets.

Fuente: WorldGrain

Car refueling on petrol station. Man pumping gasoline oil. This photo can be used for automotive industry or transportation concept

Corn ethanol boosted due to production in Brazil

Brazil’s corn ethanol sector booms on an increase of production and investments, according to a Global Agricultural Information Network (GAIN) report from the US Department of Agriculture (USDA).

The UNEM forecasts the country to produce about 2.5 billion liters of corn-based ethanol in the 2020-21 marketing year.

Currently, there are 16 corn ethanol plants in Brazil and at least four are corn-only plants, while the rest are flex plants that produce ethanol from both sugarcane and corn.

Due to plentiful and generally cheap corn supplies in Brazil, at least seven other corn-based ethanol plants in the planning, development to construction stage, which are expected to come online in the next two years according to the USDA.

Brazil’s corn ethanol production could total 5.5 billion liters per year, consuming 13 million tons of corn annually, if all ongoing ethanol plant construction projects are completed. The plants are slated to begin operations in 2021 or 2022.

In 2019, the USDA estimates Brazil produced 37.38 billion liters of ethanol, 96% of which came from sugarcane. It produced 1.33 billion liters in 2019 but the USDA anticipates it to a total of 8 billion liters by 2028.

While utilizing corn is a small-but-growing fraction of the Brazilian ethanol industry it is expected to grow quickly over the next decade.

“The sector’s investors hope this can become an important part of Brazil’s biofuels equation, as the country’s consumption of ethanol is expected to grow,” the USDA said.

The Brazilian ethanol perspective for 2020

Last month the US Department of Agriculture’s (USDA) Foreign Agricultural Service (FAS) said that Brazil’s ethanol production is expected to drop 16% as sugar-based ethanol plants divert toward sugar production.

Total ethanol production is estimated at 31.35 billion liters, down from 37.38 billion liters in 2019. Consumption for use as fuel is estimated at 27.68 billion liters, a decrease of 18% from the previous year. The FAS said this is due to social distancing measures and the economic downturn related to the coronavirus (COVID-19) pandemic.