Drought has short-term implications for US ethanol industry

07 November 2012 09:22  [Source: ICIS news]

MUNICH (ICIS)--Drought in the US has had a number of short-term implications for the country’s ethanol industry, said Mike Dwyer, director of the US Department of Agriculture’s global policy and analysis division, late on Tuesday.

Speaking at the FO Licht World Ethanol and Biofuels conference in Munich, Germany, Dwyer said the drought had caused corn prices to soar, resulting in negative margins for ethanol producers, and consequently operating rates were reduced.

Decreased production has meant that during 2012 there has not been enough ethanol production to meet blending mandates stipulated in the US Renewable Fuel Standard.

However, Dwyer said that excess renewable identification numbers and stocks accumulated during 2011 can be carried over, and will be sufficient to fulfil 2012 mandates.

The effects of the drought are temporary, so US production should rebound next year and is expected to remain strong in the long-term, Dwyer said.

By: Sarah Trinder
+44 20 8652 3214

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