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U.S. Ethanol Industry Sets Record in 2005

The ethanol industry continues to expand and estimates expect that to continue. USDA has predicted ethanol production will account for more U.S. corn than exports in 2007.

The U.S. ethanol industry set an annual production records in 2005, producing just under 4 billion gallons and averaging nearly 255,000 barrels of ethanol production daily, according to data released by the U.S. Energy Information Administration.

The month of December also set production and demand records. Ethanol production in December rose 5,000 b/d from the previous month to 280,000 b/d. Demand skyrocketed to 310,000 b/d, breaking the old record of 297,000 b/d.

The U.S. Grains Council says grain buyers around the world are wondering if U.S. farmers can produce enough to meet everyone's needs. The USDA estimates that U.S. corn exports will reach 2 billion bushels in the 2006/07 marketing year, while ethanol production will consume 2.15 billion bushels that year.

With near-record corn production in 2005 — exceeded only by the 2004 crop — the United States is positioned to remain a reliable source for international grain buyers for years to come as U.S. farmers improve production.

In addition, distiller's dried grains with solubles, a co-product of the ethanol distillation process, is becoming a regular component of feed rations as feed mill operators and livestock producers become familiar with the nutritive properties of this feed ingredient.

Ethanol production is expected to climb to 5.1 billion gallons this year and 6 billion gallons by 2007, according to the Renewable Fuels Association. Currently, 95 ethanol plants have a combined production capacity of more than 4.3 billion gallons a year. There are 34 ethanol plants and nine expansions under construction with a combined annual capacity of more than 2.1 billion gallons.