Nation’s largest ethanol producer stops work at 3 plants

One of the nation’s largest ethanol manufacturers announced this week intentions to idle production at three plants in Iowa and South Dakota.


According to the announcement, POET bioprocessing units in Chancellor, South Dakota, Ashton, Iowa, and Coon Rapids, Iowa, will be idled, while the startup of a new plant in Shelbyville, Indiana, will be delayed. The status of the plants’ employees is not known according to the Sioux City Journal.

The closures will reduce corn demand by 110 million bushels, according to POET, while ethanol production will drop by 330 million gallons between the output of the four facilities, including the Shelbyville plant which has not yet opened.

“Across the board, biofuel producers and our partners in the farm community face an unprecedented challenge,” POET founder and CEO Jeff Broin said in the statement.

“From day one of this crisis, we have placed the highest priority on protecting the health and welfare of our workers, partners and farm suppliers. At the same time, we are working hard to ensure that every biorefinery remains well-positioned to support a strong and swift recovery once daily life returns to normal. That means responding dynamically to shifting conditions and optimizing production, market by market, as the situation evolves over the next few months.”

Ethanol producers have been battered by a price crash blamed, at least in part, on the COVID-19 pandemic. As of Wednesday, ethanol prices hovered around 87 cents per gallon on the NASDAQ exchange. As recently as February, prices had been as high as $1.37, and last June prices were as high as $1.61.

POET, which also noted that foreign trade barriers and “regulatory uncertainties” in the U.S. have dimmed the industry’s outlook, reported that fuel demand is expected to decline as much as 55 percent, with an annualized drop in ethanol demand of up to 8 billion gallons, or 2.7 billion bushels of corn. 

Siouxland Ethanol, an ethanol plant in Jackson, Nebraska, announced at the end of March its intention to idle in April, citing plummeting demand. The plant said in a statement that U.S. ethanol production would need to be cut in half for them to re-start production.

Source: Sioux City Journal