
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.
“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.
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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