Farm Bureau Details COVID-19 Impact on Ethanol

April 09, 2020

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by Cindy Zimmerman (Energy.AgWired.com) Agricultural commodity prices are taking big hits from the COVID-19 emergency, and one of the most hard hit sectors is ethanol, according to the American Farm Bureau Federation (AFBF).

... Abiding by travel restrictions, people are driving far less, pushing down demand for both oil and ethanol made from corn. A 35% drop in ethanol prices caused some plants to stop production, further depressing corn prices. The sudden change also cut off the supply of dried distillers grains — a byproduct of ethanol production and source of high-protein feed — for livestock producers, who are left scrambling to find a replacement.

AFBF Economist Veronica Nigh says another impact from the decline in ethanol production is in meat processing, which uses the byproduct CO2. “Ethanol plants are the largest producers of CO2 in the U.S.,” said Nigh.

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During a telephone press call on Friday, Minnesota cattle producer Peter Bakken said he uses distillers grains for 25% of his feed and while his local ethanol plant is still operating, he is being rationed. READ MORE includes AUDIO

USDA sharply reduces estimate of corn use for ethanol (Agri-Pulse)

U.S. Ethanol Remains Available For Export During COVID-19 (U.S. Grains Council)

Ethanol production plunges 20% amid COVID-19 pandemic (Biofuels Digest)

Novozymes suspends 2020 outlook because of COVID-19, reports Q1 sales growth of 10% (Biofuels Digest) Full Announcement

Valero idles 8 ethanol plants, reduces production at 6 facilities (Ethanol Producer Magazine)

Valero idles gasoline units, ethanol plants (Argus Media)

Valero warns of up to $2.1 billion first quarter loss on demand drop (Reuters)

Weekly ethanol production falls by 20%, stocks set another record (Ethanol Producer Magazine)

Poet idles 3 plants, delays startup of Shelbyville facility (Ethanol Producer Magazine/POET)

USDA WASDE lowers production for corn use in ethanol (Ethanol Producer Magazine)

EIA: US ethanol production will fall sharply in Q2, Q3 (Ethanol Producer Magazine)

Cororonavirus could slash farm income by 19 percent (Ag Insider)

Sinking markets, Covid-19 hit US farmer sentiment (Argus Media)

Ethanol Demand Continues To Collapse, But Production Margins Are Stabilizing (Seeking Alpha)

Ethanol production plummets as people drive less during pandemic (UPI)

USGC: US ethanol remains available for export during COVID-19 (Ethanol Producer Magazine)

ALL FORMS OF CORN EXPORTS KEY TO INDUSTRY, ECONOMIST SAYS (Successful Farming)

The Biofuel Industry Is Really Struggling Right Now (Modern Farmer)

Corn Futures Fall as Ethanol Woes Mount (Market Screener)

More Wisconsin farmers filing for bankruptcy (Associated Press)

US industrial ethanol buyers in Ulsan search for other cargoes amid tight supply (S&P Global Platts)

Fred Yoder: What's Behind High Corn-Planting Acreage Forecast? (Solutions from the Land)

Excerpt from Ethanol Producer Magazine USDA WASDE... : The USDA lowered its 2019-’20 forecast for corn use in ethanol by 375 million bushels to 5.05 billion bushels in its latest World Agricultural Supply and Demand Estimates report, released on April 9.

The agency’s corn outlook for 2019-’20 is for reduced imports; greater feed and residual use; lower food, seed and industrial use; and larger stocks. Feed and residual use is raised 150 million bushels to 5.675 billion. This is based on corn stocks reported as of March 1, which indicated disappearance during the December-February quarter rose about 4 percent relative to a year ago. Lower forecast corn used for ethanol also supports larger feed and residual use.

Corn use for ethanol is lowered 375 million bushels to 5.05 billion bushels based on the latest indications from U.S. Energy Information Administration data, which indicates an unprecedented decline in ethanol production and motor gasoline consumption as a result of COVID-19. According to the USDA, 5.378 billion bushels of corn went to ethanol production in2018-’19, down from 5.605 billion bushels in 2017-’18.

Partly offsetting the decrease in corn use for ethanol is an expected increase in the amount of corn used for alcohol beverages and manufacturing use. With supply down fractionally and use declining, ending stocks are raised 200 million bushels to 2.092 billion. The season-average marketing weighted corn price received by producers is lowered 20 cents to $3.60 per bushel. READ MORE