According to the latest figures from the Energy Information Admn., ethanol production and demand reached record levels in June 2010. This, some industry observers assert, is the major impetus for rising grain commodity prices in recent weeks.
But Geoff Cooper, vice president of research and analysis, for the Renewable Fuels Assn., says it’s pure speculation that’s driving the higher prices, especially for corn. His insights can be seen at www.ethanolrfa.org/exchange.
Regardless of what’s pushing them, higher grain prices bode well for farm equipment makers for the rest of this year and into early 2011. Watch the September issue of Ag Equipment Intelligence and October/November issue of Farm Equipment for ag equipment dealers’ outlook for 2011.
Growing ethanol production is helping maintain the higher than average pricing for corn.
According to data released last week, ethanol production in June was just over 854,000 barrels per day (b/d), or 1.08 billion gallons for the month. That’s up from 846,000 b/d from May and more than 160,000 b/d higher than June 2009. Based on data from the first 6 months of 2010, U.S. ethanol production is running at 12.87 billion gallons on an annualized basis.
As calculated by the RFA, ethanol demand also reached an all-time high of 857,000 b/d, up from 721,000 b/d one year ago.
Ethanol stocks slipped slightly during the week, to 17.6 million barrels.
Gasoline demand remained relatively steady at 9.386 million b/d, or 394.2 million gallons daily. As a percentage of daily gasoline demand, daily ethanol production represented 9.12% for the week.
Ethanol producers were using 12.979 million bushels of corn daily to produce ethanol and 96,600 metric tons of livestock feed daily. Of this feed output, 85,300 metric tons were distillers grains. Additionally, ethanol producers were providing 3.7 million pounds of corn oil daily.
June 2010 Statistics
Fuel Ethanol Production 1076.5 mg* 845,367 b/d
Fuel Ethanol Use 1079.8 mg** 857,000 b/d
Fuel Ethanol Stocks 781.6 mg* 22.0 days of reserve
Ethanol Exports 16.1 mg*** n/a
Fuel Ethanol Imports 1.653 mg* n/a
(mg = million gallons; b/d = barrels per day)??
*Source: Energy Information Administration, Renewable Fuels Association
**Source: RFA calculations, does not include exports
***Source: Dept. of Commerce, Census Bureau, USDA-FAS; Export figures represent sum of “Ethyl alcohol and other spirits, denatured, of any strength” and “Undenatured ethyl alcohol of an alcoholic strength by volume of 80 percent vol. or higher.” Thus, the figures likely include ethyl alcohol exports for non-fuel industrial purposes.