ADM idles 2 ethanol plants; Growth Energy calls for federal aid

By Erin Voegele | April 27, 2020

ADM announced on April 23 it is idling ethanol production at the company’s corn dry mill facilities in Cedar Rapids, Iowa, and Columbus, Nebraska, due to impacts of the COVID-19 pandemic.

Approximately 90 employees will be furloughed in the coming weeks due to the plant shutdowns. ADM said employees will continue to receive medical benefits during the furlough and will be eligible to apply for state and federal unemployment benefits. Furloughed employees will also have the option to apply for other open positions at ADM. The anticipated length of the furloughs is currently four months, but ADM said the timeframe is dependent on market conditions and could change.

In its announcement, ADM said the company is currently managing ethanol production throughout its U.S. corn processing network to focus on cash flows to divert corn grind to other products that are in higher demand, such as alcohol for hand sanitizer.

The company said it has reduced the ethanol grind at its corn wet mills plants and rebalanced grind to produce more industrial alcohol for the sanitizer market and industrial starches for the containerboard market to better align production with current demand.

“These are very difficult decisions in a very challenging time, and unfortunately, the current market conditions and the low consumer demand for gasoline at this time have greatly impacted the entire ethanol industry,” said Chris Cuddy, president, Carbohydrate Solutions. “Our primary focus is the respect and care of our employees during this time, and we are doing everything we can to support them until market conditions improve and we can look at ways to restart production.”

Following the release of news that ADM would idle its Cedar Rapids and Columbus plants, Growth Energy released a statement calling for federal relief for the ethanol industry.

“This was the third week in a row that ethanol production hit a record-breaking low, even as stockpiles hit a new record-breaking high,” said Emily Skor, CEO of Growth Energy. “The evaporation of fuel demand due to COVID-19 has been a knock-out blow to biofuel plants across the heartland, who were already fighting an uphill battle against trade barriers, regulatory threats, and a flood of foreign oil.

“Half the industry is already offline, and now two ADM plants—one in Iowa and one in Nebraska—have been added to the growing list of plants impacted,” she continued. “Ethanol producers represent the heart of the rural economy, and when they are forced offline, the ripple effect can be felt across the agricultural supply chain—from farmers without a market for their crops to meatpackers and ranchers that rely on local ethanol plants for animal feed and carbon dioxide.

“While a great deal of uncertainty still remains, we will continue to work with our state and congressional champions who are working to secure immediate relief that will keep this highly-skilled workforce intact so we will be ready to bounce back and fuel rural America’s economic recovery. With plans to support the oil and gas industry already underway, it’s vital that policymakers give the same consideration to biofuel workers and farmers equally impacted by disruptions to the motor fuel market.

“We urge policymakers to act swiftly. We have endured downturns before, and we will again, because there is no challenge greater than the resiliency, endurance, and ingenuity of our producers and farm partners.”