Before the coronavirus even started to affect the U.S. markets, there was an ethanol price war and smaller refineries were battling waivers and EPA regulations. Now, it seems the demand for ethanol has severely decreased.
According to Geoff Cooper, the president of the Renewable Fuels Association, “We think there’s about a quarter of the industry in idle today...Ethanol prices are under a dollar... That’s down about 40-50% from where we were, just several months ago.” Cooper adds that in order to break evan a gallon of gas needs to be near $1.20.
The decline in demand will also affect corn farmers. The Associate Director for IHS Markit Economics, Ryland Maltsbarger, concluded, “There have been talks of a potential loss of a billion bushels of corn for ethanol use.” This will vary as the current pandemic continues.
The latest ethanol report did state a record high in stockpiles at 25.7 million barrels and a production drop to 840 thousand barrels a day.
