Five months into the marketing year, corn-for-ethanol use was behind pace to reach USDA’s marketing year forecast of 5.6 billion bushels, in part because the corn-to-ethanol conversion rate continues to edge higher, and in part due to sluggish September-October ethanol production. Monday afternoon’s monthly USDA Grain Crushings report pegged January corn-for-ethanol use at 460.9 million bushels, down 4.5% from 482.6 million bushels in December and down 1.5% from 467.9 million bushels in January 2025. Cumulative September-January corn-for-ethanol use totaled 2.318 billion bushels, down 0.6% from a year earlier, with USDA forecasting a marketing year increase of 3.0%.
Weekly corn-for ethanol use ran below the pace needed to meet USDA’s marketing year forecast in seven of the first 10 weeks of 2025/26, but has since strengthened, coming in near or above the needed pace in 16 of the past 17 weeks, with the notable exception of the week ended Jan. 30, when severe winter weather disrupted plant operations. However, as can be seen in the chart immediately below, corn-for-ethanol use over the remaining seven months of the marketing year must be record high in order for USDA’s marketing year forecast to be met.
As can be seen in the chart immediately below, the corn-to-ethanol conversion rate surged to unprecedented levels in 2024/25, topping three gallons per bushel for the first time in January 2025. The three-month average rate topped three gallons for the first time in February. Some observers attributed the sharp increase to the quality of the 2024 corn crop, which had an above-average starch content, but the more likely explanation for the jump was the release of new EPA guidelines for ethanol producers to test and document co-production of cellulosic ethanol with corn starch ethanol in 2024. A recent Farmdoc daily article estimated 0.1 gallons of cellulosic ethanol were produced per bushel starting in 2025, which would account for the jump.
After slipping to a 10-month low in October, the corn-ethanol conversion rate has rebounded. The record high rate of 3.12 gallons per bushel estimated for January on the chart at right may not be accurate as it is based on Energy Information Agency weekly data, which will be revised when EIA issues monthly data on March 31. But odds seem good the conversion rate reached a new record high in January. There are limits to how much ethanol can be produced per bushel of corn, though, and we may be nearing them. Starch is the primary component of corn that is converted into ethanol and the starch content of a corn kernel is roughly 70-75%, so assuming 100% conversion of starch, the maximum conversion rate should be about 3.0-3.10 gallons per bushel. However, rising conversion of corn fiber to ethanol could theoretically push the rate as high as 3.5 gallons per bushel.
