Iowa ethanol plants saw another record-breaking year in 2018, producing 4.35 billion gallons. This was up from 4.2 billion gallons in 2017. While a record, 2018 production was below the 4.5 billion gallon capacity of Iowa’s ethanol producers.
Iowa Renewable Fuels Association Executive Director Monte Shaw said the increased production is due largely to record exports as ethanol becomes the octane additive of choice around the globe. He emphasized that despite this success, rampant small-refinery exemptions to the Renewable Fuel Standard (RFS) and the trade dispute with China have stunted margins.
“This record production is a testament to the resilience of Iowa’s ethanol producers,” Shaw said. “This past year, they were hit with demand-destroying small-refinery exemptions and a closed Chinese market. The resulting low or in some cases negative margins made 2018 a tough year for ethanol producers and our corn suppliers. Iowa ethanol producers have weathered the storm fairly well given the reports of idled and even shuttered plants in other states.”
Iowa’s production is projected to make up approximately 27 percent of total U.S. ethanol production for 2018. Shaw said despite robust production numbers, action is needed to return profitability to the industry.
“Without our current export markets, the situation in rural America would be far worse today,” he said. “The fact of the matter is that ethanol producers and Iowa farmers need growing markets abroad and at home.”
Despite the current economic hardship facing rural America today, Shaw said he remains optimistic.
“We hope that 2019 can get ethanol demand out of neutral and growing again with a properly enforced RFS, year-round E15, and the reopening of the China market,” he said. “Much depends on the actions of the Trump Administration and the EPA. It is within their power to set us on the course for not only record ethanol production, but restored prosperity in rural America.”