Growth in ethanol demand will have to come from exports

Source: By Meghan Grebner, Brownfield • Posted: Sunday, January 3, 2021

An ag economist says opportunity for growth in ethanol demand isn’t going to happen in the US.

Tanner Ehmke, manager of CoBank’s Knowledge Exchange, says fundamental shifts in domestic usage of gasoline will force the industry to develop new markets for ethanol.

“We have to look abroad, send it into the export market- places like Brazil and China especially. That is a gigantic market where there is opportunity. Really the focus there for ethanol is where you can grow outside of the US when we have weaker demand here in the US.”

While the coronavirus pandemic has drastically reduced the use of gasoline in the US in 2020, Ehmke does anticipate a post-COVID spike in the coming months.

“Once the economy continues to normalize post COVID-19, fuels consumption is going to increase, ethanol consumption is going to increase, but we just don’t think it is going to be to the levels it was pre-COVID.”