US ethanol industry welcomes US-Mexico-Canada trade agreement

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US ethanol association Growth Energy has hailed the announcement of a long-awaited deal on the US-Mexico-Canada Agreement (USMCA) on trade.

The USMCA modernises the previous trade pact, strengthens the trade relationship between the three countries, and provides critical market access for US agriculture.

Commenting on the news, Growth Energy CEO Emily Skor said: “This is welcomed news for US agriculture and biofuel producers across North America. We have a rich history of trade with Mexico and Canada, and the USMCA strengthens that vital economic bond between our three nations.

“This was no easy feat, so we thank our champions in Congress and the administration for their tireless efforts to secure its approval and for pursuing much-needed economic opportunities for rural Americans.”

The USMCA provides additional market access and trade opportunities for US biofuel and its co-products. Mexico’s move to implement a 10% blend of ethanol across the country could deliver a potential new market of 1.2 billion gallons for US producers.

Meanwhile, Canada is the US’s second largest ethanol export market, receiving 347 million gallons in 2018. The Canadian market has the potential to increase over the next 10 years thanks to changes in both federal and provincial policy, including pushes by Ontario and Quebec to move to a 15% ethanol blend.

Mexico is the US’s largest export destination for dried distillers grains (DDGs), with over two million metric tons shipped in 2018. Canada was the seventh largest export destinations for DDGs in 2018, with 664,000 metric tons shipped, and is expected to be the fifth largest export destination in 2019.