Growth Energy issued a statement on April 7 discussing the continued economic hardship facing U.S. biofuel producers and farmers as ethanol plants are forced to idle due to market conditions caused by the COVID-19 pandemic.

“Biofuel producers and our farm partners are confronting an economic crisis beyond anything rural America has seen before,” said Emily Skor, CEO of Growth Energy. “Fuel demand has cratered, foreign nations have flooded the market with crude oil, and U.S. ethanol producers are bleeding cash after one of the toughest years in memory. In fact, fuel demand has fallen by more than half. On an annual basis, that equates to as many as 7 or 8 billion gallons loss of ethanol demand, or the market for approximately 2.4 to 2.7 billion bushels of corn.

“Today, Poet Biofuels, the world’s largest biofuel producer, joins dozens of other American producers that have been forced to take plants offline,” Skor continued. “The list of plants that have cut or halted production continues to grow, with examples across the United States, including California, Iowa, Idaho, Illinois, Indiana, Kansas, Michigan, Minnesota, Nebraska, Ohio, Oregon, and South Dakota. At this rate, nearly half of America’s biofuel production could soon be offline. These plants support hundreds of thousands of jobs, including a highly-skilled manufacturing workforce that rural America cannot afford to lose.

“Protecting these biofuel and farm jobs at the heart of our rural economy will be vital to ensuring that we are positioned to reinvest and rebuild in the months to come,” she said. “We urge policymakers to act swiftly to expand markets for higher biofuel blends, lift regulatory barriers to vital markets, and ensure that financial assistance is available to farmers, workers, and rural businesses hit hardest by the crisis.”

Skors statement referenced an April 7 announcement made by Poet in which the company said it is idling its plants in Chancellor, South Dakota; Ashton, Iowa; and Coon Rapids, Iowa. Poet is also delaying the start-up of its new plant in Shelbyville, Indiana. The four plants represent approximately 330 million gallons of annual production capacity.

A variety of other ethanol plants have also announced they are idling production capacity in recent weeks.

Rex American Resources announced on April 1 it has idled its Illinois-based One Earth Energy ethanol plant due to market conditions caused by the COVID-19 pandemic. The company previously announced its NuGen Energy Plant in Marion, South Dakota, would remain in idle until the threat of COVID-19 is reduced and the gross margin increase. That facility has struggled in recent months to obtain adequate supplies of corn.

KAAPA Ethanol Commodities LLC sent a letter to stakeholders on March 31 announcing the company is idling its ethanol plant in Ravenna, Nebraska, due to impacts from the COVID-19 pandemic. KAAPA plans to continue operations at its Minden, Nebraska, facility, the company said in the letter.

The Andersons announced on March 24 that it will idle its Element ethanol facility in Colwich, Kansas, for an extended maintenance and repair period and will take spring maintenance shutdowns at the four facilities owned by The Andersons Marathon Holdings LLC, a joint venture between The Andersons and Marathon Petroleum Corp.

Pacific Ethanol announced on March 27 that it planned to idle more than 60 percent of its ethanol production capacity by the end of March. Neil Koehler, president and CEO of Pacific Ethanol, didn’t specify which of the company’s plants would idle or reduce production, but said that production would be shut down in an orderly manner with the objective of meeting contractual commitments while minimizing negative cash impacts.

Siouxland Ethanol has posted a notice to its website that its facility in Jackson, Nebraska, will suspend ethanol production beginning in April 2020. “The negative impact of the COVID-19 pandemic on gasoline and ethanol demand in the United States is severe,” said Nick Bowdish, president and CEO of Siouxland Ethanol, in the notice. “Our company anticipates that total U.S. fuel ethanol production needs to be reduced by at least 50 percent until gasoline demand recovers.”

“While we pride ourselves on being an efficient producer of ethanol, we anticipate that fully suspending production is prudent,” Bowdish continued. “We intend to keep our balance sheet and financial position strong, our employees intact, and we look forward to resuming production as soon as economic circumstances allow.”

A document filed with the U.S. Securities and Exchange Commission on March 18 indicates that Heron Lake Bioenergy LLC’s board of directors had determined that it is in the best interest of the company to idle the plant, which is located in Huron Lake, Minnesota. The shutdown is expected to begin on or around March 30 and continue until the completion of the plant’s regulatory scheduled annual temporary shutdown of April 29.

Heron Lake Bioenergy also owns 50.7 percent of the Granite Falls Energy ethanol plant, located in Granite Falls, Minnesota. The company’s board of directors filed a notice with the SEC on March 19 announcing that HLBE will also idle its operations on or about March 30 and continuing until the completion of the plant’s regularly scheduled annual temporary shutdown of April 29.

Cardinal Ethanol LLC, which operates an ethanol plant in Union City, Indiana, filed a notice with the SEC on March 23 announcing its will reduce production by approximately 20 percent for the foreseeable future. The facility had previously been operating at a capacity of 140 MMgy.

Highwater Ethanol LLC made a similar filing on March 23, announcing it will cut production at its plant in Lamberton, Minnesota, by 20 percent. That facility had been operating at a rate of 67 MMgy.

Production has likely been reduced or idled at many more of the nation’s 200 ethanol plants. Ethanol production data released by the U.S. Energy Information Administration on April 1 showed U.S. ethanol production fell by more than 16 percent the week ending March 27, to an average of 840,000 barrels per day, the lowest level in more than six years. Additional weekly production data released by the EIA in upcoming weeks is expected to give a more complete picture of how COVID-19 is impacting the ethanol industry.