According to a report from Reuters, U.S. ethanol production is set to lose around 2 billion gallons of production by the end of the week, according to the head of the Renewable Fuels Assn. trade group said on Monday.
As covered in a recent episode of On The Record, the ethanol industry is likely to hit headwinds during the COVID-19 outbreak, particularly in the form of reduced gasoline consumption.
“It looks to us like we’re nearing 2 billion gallons of capacity on an annualized basis that was operating as recently as a month ago that we think by the end of this week will be offline,” sad RFA president Geoff Cooper told Reuters.
According to the report, the U.S. blends about 15 billion gallons of ethanol into the nation’s gasoline each year.
“We know a number of plants have already been forced to idle, we know more are coming and they don’t want to lose their workers,” he said.
In addition to projected lower production, the profit margin of ethanol production has reached a seven year low of minus 9.68 cents per gallon as of the week of March 20, as measured by Iowa State University’s Center for Agricultural and Rural Development (CARD).
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