FTC issues annual report on ethanol market concentration

The Federal Trade Commission on Dec. 2 issued its 2022 Report on Ethanol Market Concentration. As in prior years, the FTC’s analysis determined that there is sufficient competition among industry participants to avoid price-setting and other anticompetitive behavior.

“The low level of concentration and large number of market participants in the U.S. ethanol production industry continue to suggest that the exercise of market power to set prices, or coordinate on price or output levels, is unlikely on a nationwide basis,” the FTC said in the report.

“At this level of concentration, a single ethanol producer or marketer likely lacks market power at a national level,” the agency continued. “Successful anticompetitive coordination at a national level would require agreement among a very large number of competitors and thus is similarly unlikely. Moreover, imports and the possibility of entry would likely impede the exercise of market power by any group of domestic firms.”

According to the report, more than 100 firms produced ethanol in 2022. The largest ethanol producer’s share of domestic capacity is approximately 17 percent, flat with the previous year.

The report shows that domestic ethanol production capacity increased slightly when compared to the previous year. Actual production and exports were also up, according to the FTC.

The agency said production capacity, including capacity under construction, was at 18.1 billion gallons per year. Actual production from July 2021 through June 2022 reached 15.5 billion gallons, up from 14.5 billion gallons during the previous 12-month period. From July 2021 through June 2022, the U.S. exported approximately 1.4 billion gallons of ethanol, up from 1.27 billion gallons during the previous 12 months.

A full copy of the report can be downloaded from the FTC website.