Brazilian Ethanol Imports - Implications for U.S. Ethanol and Corn Demand FarmDocDaily
If we assume that U.S. ethanol exports this year are near the 500 million gallons we forecast earlier and that domestic ethanol consumption in 2013 is near 12.9 billion gallons, imports of 600 million gallons of Brazilian ethanol would imply domestic ethanol production of only 12.8 billion gallons. That is 400 million gallons less than our earlier projection and would require only 4.655 billion bushels of U.S. corn rather than 4.8 billion as projected earlier. Of course, all of these projections could change if relative blending margins swing back in favor of biodiesel.
Brazilian ethanol imports in 2013 of 600 million gallons are 400 million gallons larger than our earlier forecast and imply:
400 million fewer gallons of domestic ethanol production,
145 million fewer bushels of corn consumption, and
A faster drawdown in ethanol blending credits.
This analysis also underscores the importance of the rate of growth in consumption of E85. A more rapid growth rate would expand the ethanol blend wall allowing larger domestic ethanol production and larger corn consumption. We will examine the conditions necessary for E85 expansion in a future post.
Issued by Scott Irwin and Darrel Good
Department of Agricultural and Consumer Economics
University of Illinois