Ethanol producer says industry’s post-COVID outlook is improving, but not profitable

Source: By Larry Lee, Brownfield News • Posted: Thursday, July 16, 2020

An ethanol producer says the early days of coronavirus brought financial losses that unrivaled anything since the beginning of the industry.

Erik Huschitt is the CEO and General Manager at Badger State Ethanol and serves as the President of the Wisconsin Biofuels Association board. He says, “It wasn’t uncommon for an ethanol plant to be hemorrhaging millions of dollars a month at that time.”

Huschitt tells Brownfield more people are driving, which has increased demand for ethanol fuels, but the industry is not operating at a profit. “Well, we’ve come a long way from the hemorrhaging. We are in a stable ground where we can say ethanol can run uninterrupted at these levels.”

Huschitt says there is a significant part of the ethanol industry that is covering their fixed costs but are not operating at a profit. “They’ll continue to run until the banks tell them they can’t, and I honestly think we’re in a healthy enough space with most of this industry where you’ll see a lot of people that are running today continue to run at losses if that what the need be.”

Huschitt tells Brownfield there is a lot of uncertainty now, and new coronavirus-related shutdowns like California imposed this week don’t help.  He says the market is watching for signs of demand increases, but cautious about possible steps backward, which is why some producers have not reopened or ramped up production.