With gasoline prices falling, ethanol producers across Iowa are seeing their profits fall, too, and industry leaders say the timing couldn’t be worse.
Monte Shaw, executive director of the Iowa Renewable Fuels Association, says international trade feuds and reduced travel due to coronavirus are two of the primary factors for the drop in prices — which may result in the closure of some Iowa ethanol plants.
“It’s not as if we came off a period here where we’ve had some profits and we’ve been able to strengthen our balance sheets,” Shaw says. “We’ve really been coming off of two years where we’ve had a one-two gut punch in terms of refinery exemptions and having the market to China cut off and now here’s a third punch when we haven’t even had a chance to catch our breath.”
Shaw says if the current economic downturn continues, it’ll take a toll on many of Iowa’s 43 ethanol plants. You will see plants shut down and our focus is on those employees and are there things we could get some help with to make sure they can make it through this tough time,” Shaw says. “It’s not fun for anybody out there. We might be hit harder than some because of the restrictions on transportation and the cratering of oil prices, which means ethanol prices went down, but we understand that this hits everyone.”
Iowa is the nation’s top ethanol producer and the state’s plants produce about 27% of all ethanol made in the U.S.
Source: Radio Iowa