Surging Biofuel Demand Propels Growth in Corn Dry Milling Industry

The Rise of Corn Ethanol in the Biofuel Sector

Market Growth and Projections

The global dry milling market for corn, valued at USD 67.73 billion in 2017, is on an upward trajectory. Forecasts suggest that by 2022, the market could swell to USD 88.61 billion, expanding at a Compound Annual Growth Rate (CAGR) of 5.5%. This growth is attributed to the burgeoning demand for corn dry-milled products in the food industry, the widespread use of corn in animal feed, and the rising popularity of corn ethanol as a renewable energy source. MarketsandMarkets provides a comprehensive analysis of these market dynamics.

Ethanol's Dominance

In 2016, the ethanol segment led the dry milling market for corn. Developed countries have seen a significant shift in corn utilization from food and livestock feed to ethanol production. The United States, in particular, has favored ethanol production due to its abundant corn harvests. Ethanol serves as an efficient and cost-effective octane booster, offering oil refiners an economical way to enhance gasoline's octane rating to meet regulatory standards. Countries like the U.S., Brazil, China, and other leading ethanol producers have witnessed a rise in renewable ethanol production, resulting in reduced petroleum imports.

The Prevalence of Yellow Corn

Yellow corn, which dominated the market in 2016, is the preferred choice for ethanol manufacturing in developed markets. It accounts for a significant portion of global corn production and trade, thanks to its extensive cultivation and nutritional benefits. The high demand for clean and renewable corn-based ethanol is expected to further drive the market growth for yellow corn.

Geographical Insights

Asia-Pacific's Rapid Growth

Projected to grow at the highest CAGR from 2017 to 2022, the Asia-Pacific region boasts substantial corn production, leading to a well-established agricultural industry. The demand for corn dry-milled products is propelled by the presence of major consumer markets such as China, Japan, India, and other developing nations.

China, as the world's second-largest producer and consumer of corn, is at the forefront of producing quality products through improved, eco-friendly raw materials and innovative technologies. The Asia-Pacific corn market is undergoing transformation due to strategic joint ventures, acquisitions, and collaborations among global players. Additionally, the region benefits from lower labor costs and the adoption of new processing methods, making it a hub for corn product manufacturing.

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Interesting Stats and Trends

While the above information provides a broad overview of the corn dry milling market, there are several under-discussed statistics and trends worth noting:

• The United States Department of Agriculture (USDA) reports that for the 2020/2021 marketing year, approximately 5.05 billion bushels of corn were used for ethanol production in the U.S., which is about 38% of the total corn usage.
• The Renewable Fuels Association (RFA) states that in 2020, ethanol reduced greenhouse gas emissions from transportation by 46.5 million metric tons, equivalent to removing 10 million cars from the road for a year.
• The International Renewable Energy Agency (IRENA) highlights that biofuels like corn ethanol could account for 27% of the world's transportation fuel by 2050, significantly reducing reliance on fossil fuels.

These statistics underscore the critical role of the corn dry milling industry in supporting renewable energy initiatives and contributing to global sustainability efforts.