Update on Current U.S. Ethanol Production and Ending Stocks 2017: Production Sets New Record
By Sampath Jayasinghe
Decision Innovation Solutions, 11107 Aurora Avenue, Urbandale, IA 50322
U.S. ethanol production was at 1.108 million barrels per day for the week ending December 1, 2017, according to the most recent Weekly Ethanol Plant Production report from the Energy Information Administration (EIA). Figure 1 illustrates weekly production of fuel ethanol (thousand barrels per day) and weekly ending stocks of fuel ethanol (thousand barrels) from January 1, 2016 to December 1, 2017. The ending stocks of fuel ethanol were at 22.544 million barrels for the week ending December 1, 2017.
The 1.108 million barrels per day weekly production rate set December 1, 2017, is the highest production record ever in the U.S. ethanol market. This breaks the most recent production high, which occurred during the week ending November 17, 2017, at 1.107 million barrels per day. Since the week ending October 27, 2017, the weekly production sustained above 1.05 million barrels per day through December 1, 2017. Seasonal end-of-summer plant repairs and maintenance reduced September production, and the low point during 2017 was recorded on the week ending October 6 at 0.967 million gallons per day. Figure 2 depicts the ethanol production by number of week in each year from January 1, 2016, to December 1, 2017, and the two seasonal slowdown periods each year at the end of winter and the beginning of fall.
As shown in Figure 2, the weekly production rate has been, on average, four percent higher in the January-December 2017 period, compared to the same period in 2016. Weekly fall months’ production in 2017 has been approximately three percent higher than in fall 2016.
On November 30, 2017, EIA released monthly fuel ethanol production for the first, second and third quarter of 2017 (see Fuel Ethanol Supply and Disposition). Figure 3 illustrates the monthly U.S. plant fuel ethanol production in million gallons from January 2015 to September 2017. On a quarterly basis, the first quarter 2017 production was 3.939 billion gallons, 4 percent higher than the first quarter 2016 production. The second quarter production was 3.858 billion gallons, 3 percent higher than the second quarter in 2016. The third quarter production was 3.958 billion gallons, one percent higher than the third quarter in 2016. The Short-Term Energy Outlook published by EIA on November 7, 2017, predicts ethanol production will average 1.03 million barrels per day during the rest of 2017, and 1.04 million barrels per day during 2018.
Fuel ethanol blending into gasoline during this summer is projected to be 0.933 million barrels per day for the rest of 2017, and a slight increase to 0.935 in 2018. Figure 4 shows the ethanol content as a percentage in the total gasoline supplied in the U.S. market. This percentage was calculated by using two data series published by EIA: Weekly U.S. Refiner and Blender Net Input of Fuel Ethanol (Thousand Barrels per Day) and Weekly U.S. Product Supplied of Finished Motor Gasoline (Thousand Barrels per Day). As seen in Figure 4, gasoline supplied to the U.S. market consisted of an average 10.57 percent ethanol for the week ended on November 24, 2017. On an average weekly basis, 9.86 percent ethanol was included in the U.S. gasoline supply in 2017, compared to 9.69 percent in 2016.
Figure 5 shows the monthly U.S ethanol exports from 2015. Total exports in the first three quarters in 2017 was one billion gallons, compared to 0.809 billion gallons in the same period in 2016, a 24 percent increase. U.S. ethanol exports will require increases to absorb the current record high production and approaching record ending stocks. The average ethanol rack price in November 2017 reported by Nebraska Ethanol Board was $0.98 per gallon, compared to $1.64 in November 2016. The recent strength in ethanol production has led the ethanol price to drop dramatically compared to last year.