The economic impact of COVID-19 on the ethanol industry has been swift and sharp.
According to a recent analysis from the Renewable Fuels Association (RFA), deeply negative operating margins and falling consumption have led to dramatic cuts in ethanol production.
For the week ended April 10, ethanol production was 44% below the same time in 2019, hitting the lowest level since the EIA began reporting statistics in 2010.
Currently, approximately 70 ethanol facilities with an annual production capacity of 6.1 billion gallons have been fully idled, and nearly 70 more plants have reduced their operating rates by a combined 1.9 billion gallons annualized.
The restrictions and economic downturn associated with COVID-19 are having a dramatically negative impact on the ethanol industry, and this impact is expected to last through much of 2020.
Weekly consumption has already fallen by nearly 50% compared to the same time in 2019.
In response to declining usage, ethanol production could drop by 3 billion gallons for the year as a whole, a nearly 20% reduction.
The combination of lower production and falling prices is expected to cause ethanol sales to plummet by $10.5 billion, or 46%.
These impacts will have ripple effects throughout the broader U.S. economy, notably in the agriculture sector.
Read the full analysis here.
