Exports helping Nebraska’s ethanol industry to grow

Source: By Robert Pore, Grand Island Independent • Posted: Monday, March 30, 2015

Nebraska’s 2 billion-gallon-a-year ethanol industry is growing in international stature.

Last year Nebraska’s ethanol agribusiness processed 657 million bushels of corn last year. While that corn made more than 2 billion gallons of ethanol, it also produced 18 pounds of distillers grain per bushel of corn.

Distillers grains are a cereal byproduct of the distillation process. The byproduct has established itself not only as an important source of livestock feed, but a growing export product, along with ethanol itself, according to the Renewable Fuels Association (RFA).

And 2014 was a record export year for distillers grains and ethanol.

According to the RFA, the U.S. ethanol industry produced 14.3 billion gallons in 2014 — a 7.4 percent increase over the previous year.

At the end of 2014, “the ethanol industry comprised approximately 213 plants in 29 states with nameplate capacity of 15.1 billion gallons and operating at an annualized rate of 14.3 billion gallons,” the RFA noted. “At year’s end 100 million gallons of new capacity were under construction.”

According to Steve Sorem, project manager for the Nebraska Ethanol Board, the industry’s expansion of the exports of distillers grains is “huge.”

“It has had a price impact on distillers grain,” he said.

For many years, Sorem said, the price of corn and distillers grain has run a parallel track. But with the increase in distillers grain exports, the price is higher than it has been.

A recent survey of Nebraska’s ethanol plants — conducted by the Nebraska Ethanol Board — shows that dry distillers grain production is about equal to wet distillers grain production. Wet distillers grain output has always been an advantage to Nebraska’s cattle feeding industry as a source of feed. But Sorem said demand has picked up internationally for dry distillers grains.

According to the U.S. Grains Council, distillers dried grains with solubles (DDGS) are the nutrient-rich co-product of dry-milled ethanol production and is both an energy and a protein supplement.

U.S. ethanol plants process more than 30 million tons of DDGS. Through organizations such as the U.S. Grain Council and programs administered through the national corn checkoff program, DDGS has gained a global market because of its nutritional benefit.

According to the U.S. Grain Council, DDGS exports have gone from 1 million tons in 2006 to more than 11 million tons in more than 45 countries in 2014. China received the bulk of DDGS exports — 52 percent of the export market. Mexico was second at 12 percent.

According to the RFA, ethanol exports helped the industry remain profitable. The U.S. exported 836 million gallons of ethanol worth $2.1 billion to international markets, according to the RFA.

Bob Dinneen, RFA president and CEO, said the U.S. worked “diligently to increase demand for this product abroad.”

“It has been rewarding to see countries all over the world embrace the U.S.-produced, high-octane fuel,” Dinneen said.