CoBank predicts solid 2024 for US biofuels industry
SOURCE: CoBank
December 21, 2023
BY Erin Voegele
CoBank’s Knowledge Exchange on Dec. 14 released a report focused on forces that will shape the U.S. rural economy next year. The report predicts that both ethanol producers and soybean crushers will benefit from rising demand for biofuels in 2024.
“The biofuel sector at large carries the momentum of historically large profit margins into the new year,” CoBank wrote in the report. With renewable identification number (RIN) prices declining, selling renewable diesel outside of the California market is expected to be less profitable. Ethanol margins are expected to remain comparatively healthy in 2024 due to a combination of affordable natural gas prices and corn prices that are under pressure from a record harvest and weak export demand.
A slowing global economy and surplus of energy on the work market is currently depressing fuel and ethanol prices. The risk of conflict spreading in the Middle East and disrupting supply lines among oil-exporting countries could result in a global energy shock and surge in fuel and ethanol prices, according to the report.
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The report also notes that the booming renewable diesel industry combined with the shorter U.S. soybean crop harvest of 2023 will drive an expansion of soybean acreage in the U.S. next year, reducing available acreage for other crops. Soybean planted acreage is currently expected to be up 4 percent when compared to 2023, at 87 million acres. Corn acreage is expected to fall 4 percent to 91 million acres.
A full copy of the report is available on the CoBank website.
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