CHICAGO Nov 13 U.S. production of corn-based
ethanol could reach 14 billion gallons in 2014 because of
positive margins for processors and demand from buyers, Archer
Daniels Midland Co's chief executive said on Wednesday.
Production could be "in the 14 billion range" even if the
U.S. Environmental Protection Agency (EPA) lowers its target for
use of renewable fuels, ADM CEO Patricia Woertz said in a
webcast of a Morgan Stanley conference. Illinois-based ADM is
the top U.S. ethanol producer.
The EPA is expected to propose new targets for its Renewable
Fuel Standard (RFS) as early as this week.
"Regardless of where the RFS comes through, we see it as a
period where you can have positive margins," Woertz said of the
U.S. farmers are harvesting a record-large corn crop this
year and replenishing inventories depleted by last year's
historic drought. The influx of supply has pushed corn futures
to three-year lows and ethanol margins to their highest level
since late 2009, the last year of a record corn harvest.
The EPA has considered a proposal that would set next year's
target for use of renewable fuels at 15.21 billion gallons,
according to a leaked draft of the proposal. That would be less
than the 18.15-billion gallon 2014 target established in the
At 15.21 billion gallons, the proposal would leave room only
for some 13 billion gallons of corn-based ethanol to be blended
into the nation's gasoline supply, down from 13.8 billion this
year and 14.4 billion required by law for 2014.
"Keep in mind that the industry produced 14 billion gallons
before, even though the mandate was only 12.8, back in 2011,"
Woertz said. "It could be another example of the industry
producing to meet market demand."
The EPA has said gasoline blended with as much as 15 percent
ethanol, or E-15, is safe for vehicles made in 2001 or later.
But oil refiners have argued the blend could damage car engines,
and few gas stations sell it outside of the Corn Belt.
Cheaper corn and ethanol prices "will allow more retail
outlets to see the economic opportunity for them to do it on,
maybe not a one-by-one basis, but maybe in larger numbers,"
Woertz said about adding E15 pumps.