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Biofuels face uncertainty after record yearBiofuels face uncertainty after record year

Ethanol exports hit new highs and soy oil use for biofuels reached record levels in 2024. Farmers now eye red flags amid changing demand patterns and policy uncertainty.

Bruce Blythe, Senior Editor, Commodities

February 5, 2025

1 Min Read
Ethanol plant with pile of corn
Getty Images/Jmichl

After a blockbuster 2024 for U.S. biofuels, the new year brings a few bothersome questions for the industry, including: Can this momentum be sustained?

First, a few numbers worth noting:

  • U.S. ethanol exports set an annual record in 2024 at 1.72 billion gallons shipped through November.

  • Soy oil use for biofuels was forecast to be a record.

  • Corn for ethanol was near its second-highest level ever.

Still, potential warning signs loom, with biodiesel use expected to drop 17% in 2025, according to a recent forecast by the Energy Information Administration.

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“Although the ethanol demand for corn is strong, it’s showing signs of softening as ethanol margins weaken from rising corn and natural gas prices,” CoBank analysts said in a January report. Ethanol production appears to have stalled while stockpiles increase seasonally.

More demand uncertainty lies in the Trump trade and biofuel policy. “Should U.S. corn exports retreat in a trade war, U.S. ethanol processors stand to benefit from cheaper corn prices, but biofuels could also be targeted in a tit-for-tat trade schism,” CoBank analysts wrote.

For U.S. farmers, robust demand for biofuel has been a rare bright spot in an otherwise dismal period for grain markets. Biofuels demand and renewable fuels policy will be key to market direction this year.

Related:Corn flexes its muscles in acres battle

Despite the uncertainty, CoBank economist Jacqui Fatka says biofuels are still “positioned for 2025 success,” assuming continuing tailwinds from strong exports and stepped-up biofuels mandates.

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Biofuels

About the Author

Bruce Blythe

Senior Editor, Commodities, Farm Futures

Bruce Blythe is a senior editor at Farm Futures. He has covered commodity markets, agribusiness and the farm economy for Bloomberg, Dow Jones Newswires, Reuters and Farm Journal Media's Pro Farmer. He got his start in ag news as a wire service reporter writing about the livestock and grain futures markets from the trading floors of the Chicago Mercantile Exchange and the Chicago Board of Trade.

Blythe also worked as an assistant managing editor at Crain’s Chicago Business and, most recently, as a financial writer and editor for Charles Schwab's Insights & Education editorial team. 

He grew up on his family’s grain and livestock farm outside Williamsburg, Iowa, and holds a degree in agricultural journalism from Iowa State University. He lives in Elmhurst, Ill., with his family.

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