(KMAland) -- Good news has been hard to come by in the ethanol industry since the COVID-19 outbreak began back in March. However, Jim Mintert, Director of the Center for Commercial Agriculture at Purdue University, says the industry is trying to bounce back despite some significant struggles in recent months.
“Ethanol production was really hanging in there pretty well until about the third week of March, and then from that point forward, we started seeing ethanol plants shut down, and in other cases slow down, and we saw some weeks there in mid-to-late April and early May when ethanol production was running at about 45 to 50 percent below where it was in early January.”
He says the numbers are showing that the ethanol industry has made progress over the last few weeks.
“Ethanol production has come back up. The most recent data we have is from the Energy Information Agency, down about 24 percent compared to that first week in January, so ethanol production is not back to where it was early in the year, but it has come back substantially these last four or five weeks.”
Getting further into the summer driving season should get the ethanol industry on a continuing path toward profitability.
“As we look ahead to the summer when gasoline usage normally rises, I think there’s a chance we could see that come back even more over the next few weeks, so, a bit of optimism there. If you look at gasoline and ethanol prices, those have also bounced back, and these are the wholesale prices. So, as you look at the unleaded gasoline price, it’s up from 63 cents in April to $1.06 in May. On the ethanol side, an average of 59 cents in April versus 75 cents in May, and so that’s had an impact in terms of profitability for those ethanol plants.”