The United States Department of Agriculture (USDA) has raised its forecast for U.S. ethanol export volumes for fiscal year (FY) 2025, predicting a record 1.85 billion gallons, according to the agency’s latest quarterly trade outlook released on February 27, 2025. This updated forecast represents a slight increase compared to the previous quarterly outlook.
Despite the higher export volume forecast, the value of FY 2025 ethanol exports remains at $4.2 billion, unchanged from the November outlook. If this projection is realized, it will match the record value set in FY 2024. The slight increase in export volumes is expected to be countered by modestly lower export unit values, influenced by lower year-over-year corn and crude oil prices.
Top U.S. Ethanol Export Markets
The USDA anticipates that shipments to the top five U.S. ethanol export markets—Canada, the European Union, India, the United Kingdom, and Colombia—will be slightly higher in FY 2025. Key highlights for each market include:
- Canada: Conditions in Canada remain favorable for U.S. ethanol exports, with higher blending supported by federal and provincial policies. U.S. sales cover approximately 60% of Canada's domestic demand.
- European Union and the U.K.: U.S. sales to the U.K. and select EU countries are tracking higher due to increased blending and favorable pricing compared with Brazilian ethanol.
- India: Demand for U.S. ethanol remains strong for non-fuel applications, as India’s domestic ethanol production is increasingly diverted to its fuel market.
- Colombia: Demand for U.S. ethanol in Colombia is slightly higher as the country reaches its E10 blending goal.
Challenges in the Brazilian Market
Despite the favorable outlook for other key export markets, U.S. ethanol export opportunities in Brazil remain constrained by the country’s 18% import duty on ethanol. This tariff continues to limit U.S. ethanol's competitiveness in the Brazilian market.
Future Outlook
The USDA’s positive outlook for FY 2025 reflects the strength of U.S. ethanol in global markets, supported by favorable policies, competitive pricing, and growing demand for ethanol across key international markets. However, ongoing challenges such as trade policies and fluctuating commodity prices may continue to impact the sector.
