The Ethanol (denatured and undenatured for non-beverage use) industry in the United States exported a ghastly five-times the amount of ethanol in the first quarter of this year than it did the first quarter of last year in 2009 (Figure 1). This 2010 first quarter figure of 83.5 million gallons already exported in the first three months of this year is the major driving force behind the outstanding reality that these producers have already reached 71 percent of last year’s total exports of ethanol (Figure 1). If the U.S. ethanol industry could somehow maintain this astronomical pace they have the potential to export up to three or even four times more ethanol than last year. The reason for the industries recent fortune has a great deal to do with simple economics. Currently the United States has the lowest-cost of all of these ethanol producers. One of the first features of economics is the inverse relationship between a products price and demand, when price goes up, demand goes down, and vice versa. As a result of this law of demand because the price of U.S. ethanol went down, this caused the incredible increase in global demand for U.S. ethanol. The U.S. Census Bureau chart below shows just how dramatic this current U.S. ethanol surge is.
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