The Federal Trade Commission has issued its 2015 Report on Ethanol Market Concentration. As in prior years, the report concludes that it is &ldquo;extremely unlikely that a single ethanol producer or marketer or group of such firms could exercise market power to set prices or coordinate on price or output levels.&rdquo;
The annual report is required by the Energy Policy Act of 2005 in order to &ldquo;determine whether there is sufficient competition among industry participants to avoid price-setting and other anticompetitive behavior.&rdquo;
According to the report, the number of firms producing ethanol decreased slightly since last year&rsquo;s analysis. As of September, the report indicates the U.S. has 146 firms that can produce or are likely to begin producing ethanol within the next 12 to 18 months. In September 2014, the FTC&rsquo;s report showed 148 firms could produce or were likely to begin producing ethanol over the following 12 to 18 months.
The report notes the largest ethanol producer&rsquo;s share of domestic capacity is currently at 11 percent, which is unchanged from its 2014 percent share.
According to the FTC, the U.S. ethanol industry is unconcentrated today, suggesting any unilateral or coordinated attempt to exercise market power is highly unlikely. In fact, the industry is less concentrated today than it was in 2005, when the FTC published its first report on ethanol market concentration. In the event the industry becomes more concentrated, the report notes the possibility of new firms entering the domestic market and the responsiveness of ethanol imports to relative changes in domestic ethanol prices would likely provide additional constraints on anticompetitive behavior by domestic firms.
A full copy of the report can be downloaded from the FTC <a href="https://www.ftc.gov/system/files/documents/reports/federal-trade-commission-report-congress-ethanol-market-concentration-december-2015/2015ethanolreport.pdf" target="_blank">website</a>.
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The Federal Trade Commission has issued its 2015 Report on Ethanol Market Concentration. As in prior years, the report concludes that any unilateral or coordinated attempt to exercise market power in the U.S. ethanol industry is highly unlikely.

FTC report: US ethanol market remains unconcentrated

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