December brought good news for US farmers and ethanol and dried distillers grains (DDGs) producers as the country reached important trade deals with Canada, Mexico and Japan.

The US-Mexico-Canada Agreement (USMCA) on trade ensures additional market access and trade opportunities for biofuels made in the US and their coproducts. The US-Japan Trade Agreement, on the other hand, reduces or eliminates import tariffs on US corn and provides for a staged reduction of duties on US ethanol.

According to trade association Growth Energy, Mexico’s 10% ethanol blend plan could represent a 1.2-billion-gallon opportunity for US producers. The country is also the US’ top DDGs export market with over 2 million tonnes delivered in 2018.

Canada, which is already the US’ second-largest ethanol export destination with 347 million gallons sold in 2018, is expected to witness increased demand for the biofuel driven by federal and provincial policy and the ambitions of provinces like Ontario and Quebec to introduce a 15% ethanol blend.

Japan is the eighth largest buyer of US dried distiller’s grains with solubles (DDGS), which will continue to enjoy duty-free market access under the new deal. Additional discussions are being held to address non-tariff trade barriers for US ethanol.


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