The Renewable Fuels Association released a report yesterday regarding U.S. ethanol exports. According to the report, our ethanol exports are surging partly because the U.S. is the lowest cost producer right now and also because we have extra ethanol we can’t use within our country.
Both of these concepts might come as a shock to you so let me give a brief explanation. Ethanol produced in Iowa is currently $1 cheaper per gallon than ethanol produced in Brazil. Blending 10% ethanol from Iowa into a gallon of gasoline would be $0.11 cheaper than the same blend containing ethanol from Brazil.
I’m not shocked that U.S. farmers and ethanol producers are the most efficient in the world, but I’m sure some are.
And in regards to the second point, we do have additional gallons of ethanol that we can’t use in the U.S. right now. Since the U.S. Environmental Protection Agency will only allow a 10% of each gallon of gasoline to be ethanol, we simply don’t have any more gallons of gasoline to blend into.
But all the summaries and background information aside (you can read that here), there are a couple of take home messages from this data that I just can’t ignore.
First, I wish the world, the government, and the American consumer would notice that American corn farmers are doing EXACTLY as we said they would – they are producing more than enough corn to feed and fuel the world. Corn farmers have grown enough corn to feed all the livestock in the U.S., to export corn to other countries to feed their livestock, to fulfill the needs of all the food markets in our country, to produce all the ethanol that our entire nation can use, and now to ship our ethanol to other countries.
Why did anyone doubt us and when is someone going to notice? American corn farmers can produce corn. They can produce exponential yields using less fertilizer, fewer chemicals, and contributing to minimal soil erosion. When is someone going to stand up and give the corn farmer credit for this incredible story of production and environmental stewardship?
Secondly, and maybe more importantly, why are we shipping ethanol to other countries at the expense of our own energy security!?
To quote the RFA report, “As long as domestic ethanol usage is restricted by the regulatory limitation on 10% blends, the U.S. ethanol industry will be forced to look to the global marketplace for new demand sources. And, as a result, Americans will miss out on the opportunity for greater fuel savings and a healthier, more secure domestic energy supply.”
I admit that I obviously have a bias because I love corn farmers, I love corn, and I love ethanol. But am I the only one thinking that trading our safety, our health, and our cash for more oil overseas because of government rhetoric is crazy?
ICGA/ICMB Technology & Business Development Director
(and ethanol expert!)