NFB: COVID-19 loss to Nebraska ethanol industry could top $1.3B

By Erin Voegele | June 19, 2020

Analysis conducted by the Nebraska Farm Bureau indicates the state’s agricultural economy could face nearly $3.7 billion in losses from COVID-19, including a $1.303 billion loss for the Nebraska ethanol industry.

“To provide some perspective, $3.7 billion is more than 80 percent of the state of Nebraska’s entire budget. We are talking about the potential for major losses. And while the analysis does not account for any financial assistance farmers and ranchers may receive through state and federal COVID-19 relief programs, it clearly demonstrates the magnitude of the financial challenges currently facing farm and ranch families and the potential impacts that could be felt across the broader rural economy,” said Jay Rempe, Nebraska Farm Bureau senior economist and author of the report.

For ethanol, the analysis shows there are two different impacts, including reduced production and subsequent loss of revenue from the drop in gasoline demand and the price declines on gallons produced.

At the time the report was published on June 10, Nebraska’s ethanol industry was operating at approximately 65 percent capacity, with eight plants idled and two operating at decreased capacity.

The $1.303 billion in potential estimated loss includes a loss of $305 million from March and April when the state’s ethanol industry was operating at approximately 59 percent of capacity, a $458 million loss for May through July when the industry is expected to operate at 65 percent of capacity, and a $540 million loss for August through December if the industry is operating at 75 percent capacity. According to the NFB, the estimated direct losses for the ethanol sector would equate to approximately 34 percent of the sector’s total sales in 2017.

A full copy of the report can be downloaded from the NFB website.