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Jan 18, 2021

Dozens of Ethanol Plants Remain Idle

RFA estimates two dozen of 200 ethanol facilities are idled, two dozen more reduced production rates

source: Successful Farming

The Renewable Fuels Association (RFA) recently estimated that about two dozen of the 200 ethanol plants in the U.S. are idled and another two dozen have reduced their production rates, reports Successful Farming.

“The corn market started moving higher a month ago and has spiked over the past couple of days," Scott Richman, chief economist for the RFA, told Successful Farming.

With the higher prices of corn and the worsening impact of the pandemic on fuel consumption, ethanol plant margins turned negative in early December, he said, and had recently started to return to break-even levels when the most recent corn price spike hit.

“This latest move in the corn rally will likely have a negative impact on margins,” he added.

Higher corn prices from the most recent rally and their expected negative impact on ethanol industry margins in the New Year are coming on the heels of the ethanol industry’s deep downturn in 2020, Richman said. The RFA estimates that the ethanol industry had $4 billion in foregone revenues from March through November because of the coronavirus.

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