COVID-19, Economic Conditions Causing Significant Cuts to Corn Buying
Experts expect a drop in ethanol demand of 957 million gallons between March and May due to the intensifying COVID-19 pandemic, falling gasoline demand, and an ongoing oil price war.
As a result, POET, one of the largest ethanol producers in the U.S. has decided to alter operations, and temporarily halt its corn purchases at seven of its 27 nationwide plants.
Despite ethanol plants being designated as critical infrastructure by Homeland Security, the South Dakota-based company’s 35 million-gallon plant in Bingham Lake, Minnesota, is not bidding for corn; its 42 million-gallon plant in Glenville, Minnesota, is taking only contracted grain, or overruns on day of unload at the closing bid; its 56 million-gallon plant in Lake Crystal, Minnesota, is only taking contracted corn; its 79 million-gallon plant in Big Stone, South Dakota, is currently only offering bids for overrun bushels, as is its 68 million-gallon plant in Big Stone, South Dakota; and its 69 million-gallon plant in Gowrie, Iowa, is only accepting contracted bushels; and its 75 million-gallon plant in Groton, Iowa, is bidding for only overrun bushels.
Collectively, all seven plants at full capacity have a corn demand of 151.4 million bushels to support production of 424 million gallons. Additionally, Nebraska-based Husker Ag also announced its plans to not restart production at one of its plants that is currently down for maintenance.