Lake Area Corn Processors reduces production

By Erin Voegele | April 13, 2020

Lake Area Corn Processors LLC filed an 8-K with the U.S. Securities and Exchange Commission on April 13 announcing the company plans to reduce ethanol production at its 90 MMgy corn ethanol plant in Wentworth, South Dakota.

In the filing, LACP said it “anticipates materially reducing ethanol production during April 2020” due to current market conditions. According to the company, the reduction may continue for the rest of its second fiscal second quarter. “Market conditions are continually changing and management’s projected production rates may change,” the company said. “If gasoline demand increases in the future it may result in additional ethanol demand which could impact our anticipated production levels in the future.”

Many U.S. ethanol plants have reduced production or idled in recent weeks due to the impacts from the COVID-19 pandemic. Data released by the U.S. Energy Information Administration on April 8 indicates ethanol production fell to an average of 672,000 barrels per day the week ending April 3. That volume is down 330,000 barrels per day when compared to the same week of 2019, and down 407,000 barrels per day when compared production during the final week February 2020.

The EIA currently expects low ethanol production rates to persist for several months. The agency released its latest Short-Term Energy Outlook on April 7, predicting that ethanol production will average 630,000 gallons per day during the second quarter of this year, increasing to 740,000 barrels per day in the third quarter.