Fuel Demand Rout Sends U.S. Ethanol Output to Lowest in a Decade

Source: By Michael Hirtzer, Bloomberg • Posted: Wednesday, April 8, 2020

The American ethanol industry is cutting production like never before as coronavirus lockdowns keep drivers off the roads, crushing demand for fuel.

Output of corn-based biofuel plunged by a record 20% to an average daily rate of 672,000 barrels. That’s the lowest rate since the Energy Information Administration began publishing weekly data in mid-2010. Stockpiles jumped to a record 27 million barrels, underscoring the demand struggles.

U.S. output lowest since 2010 as stocks rise to record

Federal regulations mandate nearly every gallon of gasoline sold in the U.S. contain about 10% ethanol. However, after the virus helped drive down oil prices amid a dispute between Russia and Saudi Arabia over production levels, ethanol producers can no longer profitably make the fuel. Dozens of plants have idled or slowed, including top producer POET, which said Tuesday it was idling three facilities in Iowa and South Dakota.

Meanwhile, 15 U.S. senators including Joni Ernst of Iowa have sent a letter to the Department of Agriculture requesting ethanol makers receive coronavirus relief funds earmarked for the farm sector. The sector accounts for more than a third of corn demand.

Joni Ernst


The decrease in fuel consumption due to social distancing has left some of Iowa’s biofuel facilities little choice but to idle production or close completely. I’m urging @USDA to support our biofuel producers and workers during this crisis.

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— With assistance by Dominic Carey, Jennifer A Dlouhy, and Steven T. Dennis