The U.S. Energy Information Administration (EIA) has released its annual report on U.S. ethanol production capacity for 2013. The 193 U.S. ethanol plants have a total capacity of 903,000 barrels a day, slightly more than the capacity available in 2012, with about 91% of total capacity located in the Midwestern corn-growing states.

So far this year, daily consumption of motor fuel has ranged between 8.32 million barrels a day and 8.53 million barrels a day, indicating that demand for ethanol should be about 800,000 to 820,000 barrels a day, well within the available plant capacity. Actual U.S. production in February of this year totaled 809,000 barrels a day, according to the latest figures available from the EIA. The EIA estimates that ethanol production will average about 860,000 barrels a day in 2013, with production rising from 840,000 barrels a day in the first half of the year to around 900,000 barrels a day in the second half.

Ethanol is expected to consume nearly 5 billion bushels of corn this year, out of a total crop now projected to come in at around 12.3 billion bushels. As before, about 40% of the U.S. corn crop now goes into ethanol production. The production projection fell because of late planting in some areas due to cool, wet weather.

The two largest publicly traded ethanol producers in the country, Archer Daniels Midland Co. (NYSE: ADM) and Valero Energy Corp. (NYSE: VLO), either experienced reduced operating profit (ADM) or a net loss (Valero) on ethanol production in 2012. High corn prices, due mainly to last year’s drought, combined with higher ethanol inventories contributed the lower or negative margins.

The inventory problems appear to be behind the producers now, and corn prices, though higher than last year at the same time, remain relatively low at around $6.35 a bushel.

In a nutshell, U.S. ethanol capacity should be able adequately to supply demand from U.S. drivers, who continue to drive less than they did a year ago. Ethanol prices should remain reasonable as well, barring more bad news about crop yields or renewable energy credits.

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