The Renewable Fuels Monthly Report is now being produced as a partnership between the Agricultural Marketing Resource Center operated by the Value Added Agriculture Program at Iowa State Extension and Outreach (ISUEO), the Iowa Grain Quality Initiative (IGQI), an ISUEO program directed specifically at grain processing and handling, and is authored by Decision Innovation Solutions, LLC, an economic research and analysis firm located in Urbandale, Iowa.
Based on the latest U.S. Bioenergy Statistics monthly data from USDA-ERS (USDA-ERS, 2016), U.S. ethanol production in December 2015 was 1.3 billion gallons, increasing 5% from the previous month and about 1% from a year ago. U.S. domestic ethanol production during 2015 reached a volume of 14.8 billion gallons (see Figure 1), rising 3.4% from the same period last year.
The U.S. ethanol industry will face several notable challenges in 2016, mainly low ethanol prices, high stocks, and a low production margin. The blending value of ethanol is largely correlated to the price of gasoline. As shown in Figure 1, the average rack price of ethanol in February 2016 was $1.46 per gallon and the average rack price of gasoline was $1.02 per gallon.
Ethanol yield can be broadly defined as the number of ethanol gallons per one bushel of corn. This number can vary from dry mill plant to wet mill plant. According to a U.S. Energy Information Administration (EIA) report published in May 2015, the ethanol average yield was approximately 2.8 in 2014 compared with 2.5 in 1982.
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