Ethanol Production

One of the reports I get every week from the Renewable Fuels Association is the Weekly Ethanol Production report. It is one of the indicators I watch that is a refection of demand for corn. There is no question that ethanol supports corn prices even though the corn does not all disappear when it is fermented onto ethanol. The fermentation removes the starch, but what is left, dried distillers grains is a high protein livestock feed. About one third of the corn grown in the United States every year goes through an ethanol plant before what is left, dried distillers grains is fed to livestock.

Last week the ethanol industry in the United States produced 1.077 million barrels per day. That represents 45.23 million gallons per day. This represents the third largest weekly volume on record. The 4 week average ethanol production was another record. This means a lot of crude oil does not have to be imported from countries in the world many of which do not like us. If you look at total gallons of gasoline and ethanol used last week every gallon of gasoline was blended with 11.43 percent ethanol. It is amazing that corn farmers produce around 11 percent of the fuel you put in your car!