Reduced fuel demand hitting ethanol producers hard
The ethanol industry says the coronavirus is hitting them hard because of reduced fuel demand.
The Renewable Fuels Association says plants are slowing or shutting down production. Randy Doyal with Al-Corn Clean Fuels in Claremont, Minnesota told reporters producers are running out of places to put what they make. “We may be forced with shutdowns due to logistics issues, not being able to move the product out because all of our customer’s tanks are full, and then ours are full. I would say that looks almost inevitable.”
The RFA estimates plants with about two billion gallons of annualized output might shut down by the end of this week. They say U.S. producers make around 15 billion gallons of ethanol a year.
The U.S. Energy Information Administration says for the week ending March 20th, ethanol production scaled back 30-thousand barrels a day, or 2.9%. The RFA says that’s equal to 42.2 million gallons a day and is the lowest production volume since October of last year.