Potential for Ethanol Exports to China

A trade mission to China last week revealed great potential for U.S. ethanol producers.

The USDA-led a mission to promote U.S. biofuels and agricultural product exports was part of President Obama’s “Made in Rural America” export and investment initiative, designed to help rural businesses and leaders take advantage of new investment opportunities and access new customers and markets abroad. Leaders from state departments of agriculture in Colorado, Iowa, Kansas, Minnesota, North Dakota, Oklahoma, Pennsylvania and Washington participated in the mission, along with representatives from 28 U.S. biofuels and agriculture companies and organizations.

Growth Energy Chief Economist Jim Miller, who formerly served as USDA Under Secretary for Farm and Foreign Agricultural Services, participated in the trip led by the current under secretary Michael Scuse. “Our goal was really to gauge what are the intermediate term opportunities to export ethanol to China, as well as to discuss the situation concerning our exports of distillers dried grains to China, which happens to be our largest export market for that commodity,” said Miller during a telephone press conference Tuesday regarding the mission.

National Farmers Union president Roger Johnson says the trip revealed that the potential ethanol export market in China is substantial. “Demand for ethanol is high, and domestic production meets less than half of their projected ethanol needs,” said Johnson. “However, in order to meet this demand, it is clear that we must first resolve some government regulatory and environmental issues.” Johnson added that there are issues with exports of the ethanol co-product distillers grains (DDGs) to China. “DDG exports to China will likely continue to be difficult and sporadic until China modifies its biotech approval process so it is comparable to that of the rest of the world,” he said.

Kelly Davis of the Renewable Fuels Association (RFA) was also on the trip. Listen to their observations here: China Mission Press Conference Opening Remarks