The Commission has issued the “2009 Report on Ethanol Market Concentration.” This is the FTC’s fifth annual report on the state of ethanol production in the United States, as required by the Energy Policy Act of 2005. The report concludes that the U.S. fuel ethanol market, measured either on the basis of production capacity or on actual production, remains unconcentrated.
As of September 2009, 160 firms produced ethanol in the United States – the same number as cited in the FTC’s 2008 report. In addition, the largest ethanol producer’s share of capacity remained the same, at 11 percent of domestic ethanol production capacity, down from 16 percent in 2007, 21 percent in 2006, 26 percent in 2005, and 41 percent in 2000.
As in previous reports, FTC staff calculated market concentration for the ethanol production industry using different measures. Staff measured the market share for each producer according, first, to the producer’s production capacity and, second, to its actual production. Staff then performed separate concentration calculations using three different methods that attribute market share to: 1) the producer itself; 2) the firm that actually marketed the producer’s ethanol output; and 3) the marketing firm only when marketing the producer’s volumes pursuant to a pooling agreement.
