USDA forecasts $2.4 billion in US ethanol exports for FY 2022

By Erin Voegele | August 30, 2021

The USDA predicts fiscal year (FY) 2021 ethanol exports will be at $2.2 billion, down $60 million when compared to FY 2020. Moving into FY 2022, however, U.S. ethanol exports are expected to reach $2.4 billion, up $200 million from FY 2021.

The agency made those predictions in its latest quarterly trade forecast, released Aug. 26. Beginning with this latest quarterly trade forecast, the USDA said it is adopting the World Trade Organization’s definition of “agricultural products,” which adds ethanol, distilled spirits and other products to the agency’s previous definition of agricultural products.

According to the Aug. 26 export forecast, the USDA currently predicts U.S. ethanol exports for FY 2022 will reach $2.4 billion, up $200 million from FY 2021 on volume and unit value gains. The agency said higher expected corn prices keep ethanol unit values elevated. Modest volume gains are projected for many markets, as gasoline fuel markets continue to recover and demand for industrial ethanol grows with the economic recovery and continued elevated demand for disinfectants.

For FY 2022, the largest export gains for U.S. ethanol are expected for Brazil and the U.K. The USDA said an expected sharp sales increase to Brazil is supported by the recent drought and frost damage that lowered sugarcane yields, higher sugar prices, and ongoing fuel recovery demand. The U.K. is raising its fuel ethanol blend to E10 this fall, increasing their overall demand, the agency added. India’s push to meet its E20 by 2025 continues to expand the demand for industrial ethanol. Uncertainty persists on the future of fuel ethanol exports to China, according to the USDA. The agency also said that the proportion of U.S. ethanol exports used as fuel remains at a historically low 60 percent since the pandemic eroded gasoline use and spurred demand for disinfectants.

For FY 2021, the USDA predicts ethanol exports will be at $2.2 billion, down $60 million from the previous year with higher export unit values only partially offsetting lower export volume. U.S. exports of fuel ethanol to Brazil in FY 2021 have fallen to levels not seen in a decade, according to the agency. In addition, Colombia’s lower blend mandate has reduced imports from the U.S. Exports sales to Mexico and Nigeria are also down from FY 2020 records, following the earlier demand surge for medical-grade ethanol. U.S. industrial ethanol sales to India are lower due to higher U.S. prices and the substitution of surplus sugar supplies to ethanol. U.S. fuel ethanol exports to China reached their second-highest level on record due to low, early-year U.S. prices, according to the USDA. U.S. sales to Canada are up on fuel demand recovery, while sales to South Korea are up due to record demand for industrial product.

A full copy of the quarterly trade forecast can be downloaded from the USDA website