SARASOTA, Florida (DTN) -- U.S. ethanol exports, once wildly undependable, are growing into a bread-and-butter portion of corn demand.
The U.S. Grains Council, which runs foreign market development programs for ethanol, set goals to expand exports to 1.1 billion gallons annually in the next three years and 2.3 billion gallons in 10 years at its membership meeting earlier this week.
The U.S. exported 835.6 million gallons of ethanol in 2015, about 1 million gallons more than the previous year, according to USDA.
"That's exactly what the strategy is trying to do: create steady markets, not markets that are here today and gone tomorrow," USGC CEO Tom Sleight told DTN. "That's why we seek dialogue on things like air pollution in India and China."
Mexico is transitioning its oil and gas sector to a free market over the next several years, and Sleight sees it as a potentially strong export market, not just for ethanol, but also for blended gasoline.
It takes 392 million bushels of corn to produce 1.1 billion gallons of ethanol and 821 mb to produce 2.3 billion gallons, and USGC leaders hope growing exports will add to corn demand's bottom line.
The focus on ethanol exports comes at a time when corn exports are on the decline. USDA projects corn exports will fall by 11% in 2015-16, but current sales and shipment data are running 25% and 21% behind last year's figures, respectively.
Sleight said it's important to remember that we've been here before.
"We've been in times of strong dollars and when supplies are weighing on the markets," he said. "It's not like we don't know how to deal with this. I always say, you have to look at the positives."
Grains Council leaders think they can "really move the needle of demand" in China, India and Mexico. Car ownership is on the rise in those countries, as is fuel demand. All have the potential to increase ethanol inclusion rates either by expanding or enforcing current biofuel mandates.
The three countries also have some of the worst air quality and pollution.
"It's a very exciting time to be in Mexico right now in terms of energy," said USGC assistant director Ryan LeGrand, who lives in Mexico.
The Mexican government has controlled all aspects of its oil and gas industry from exploration and drilling to the gas station since 1938. A bill recently passed that will phase in a free market by 2018.
"At the same time, Mexico is exploring renewable energy initiatives," LeGrand said. "They don't have any mandates in place or anything, but we feel like we're getting in at the ground floor of this energy reform, and it's a great time to supplant U.S. ethanol into Mexico's energy sector."
His division of the Grains Council is planning educational seminars and coordinating visits between the U.S. ethanol industry and Mexican gasoline entrepreneurs.
Some Chinese provinces currently have biofuel mandates, but are having difficulties meeting them. China was the second largest market for U.S. ethanol in 2014-15 behind Canada.
India has struggled to meet its 10% ethanol mandate, partially because it is geared toward ethanol produced from sugarcane. USGC staff estimate the actually number is about 3%.
Sleight thinks the biggest opportunities in China and India revolve around ethanol's ability to improve air quality. New Delhi, India's capital, has the world's worst air quality, according to a 2014 survey by the World Health Organization. Beijing is also at the top of the list.
"What first started out as a very cautious discussion on bioenergy, moved into a discussion on how we can be partners," Sleight said. "These are really positive things and expanding that dialogue -- we're going to be working on it hard this spring and summer."
There are lots of other markets where ethanol exports could expand, such as the Philippines and Peru, that already have biofuel mandates in place. USGC chairman and Nebraska farmer Alan Tiemann said he's joining Ag Secretary Tom Vilsack on a trade mission to Peru later this year that includes ethanol.
"There are countries that already want it," he said. "They just haven't logistically been able to get there yet. Some of it's infrastructure, some of it's pricing. With oil as cheap as it is on the world market right now that may be something that's holding them back."
You can only feed so much corn to cows and pigs and chickens, he said.
"If we have a global supply of grain that's meeting those needs, what else can we do? Well, ethanol fills that next level. The clean air side of it, I think, is where it's at."
Katie Micik can be reached at firstname.lastname@example.org
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