Ethanol Industry Continues Recovery: Rising Ethanol, DDGs Prices Fuel Industry's Recovery from COVID Shutdown

by Todd Neeley (DTN Progressive Farmer) Falling demand for gasoline earlier this year from the COVID-19 economic shutdown sent ethanol producers into a tailspin. Plants closed down and cut production, as margins dipped to their lowest levels ever.

Donna Funk, a certified public accountant with K-Coe Isom based in Lenexa, Kansas, who works with ethanol plants, said the industry is beginning to get a break from what has been a difficult year.

"Most of the plants we work with are at 80%-plus production capacity. Those that aren't at 100% are slowed a bit for a whole host of reasons," she said.

"Margins have been getting a little better and folks are starting to feel better, not great about financial results, but the deep bleeding seems to have stopped for now. Keeping production in line with demand is going to be key to keeping results going in the right direction."

At the moment, Funk said ethanol companies are focused on finding ways to diversify revenue streams, including carbon capture or other products.

"They all know they have to look different to continue to produce returns for the shareholders," she said.

In addition, the ethanol industry continues to wait for EPA to release proposed renewable volume obligations in the Renewable Fuel Standard. The agency has until Nov. 30 to finalize a rule but has yet to release a proposal. READ MORE