Corn farmers struggle as COVID-19 pandemic shuts down demand for ethanol

Last year, the nation’s corn farmers sent more than 5 billion bushels of corn to the ethanol industry.

“That’s about 40 percent of our product,” said Jeff Kirwan, an Illinois corn farmer and member of the board of the Illinois Farm Bureau.

With people driving less, that 40 percent of the corn market is disappearing. Ethanol is a form of alcohol used as an additive to gasoline, and the gasoline market is tanking fast. A spat between Saudi Arabia and Russia has lowered crude oil prices, Kirwan said. And the COVID-19 pandemic means “people aren’t driving. Nobody’s using gas.” And ethanol plants, he said, are slowing or shutting down.

“You’ve got ethanol backing up in the pipeline. You’ve got storage facilities getting full. I mean, there’s just not a lot of choices here,” Kirwan said.

Like many farmers, Kirwan, who is a board member of the Illinois Farm Bureau, plants a rotation of corn and soybeans. For him, it is half and half, for some other farmers corn is two-thirds of their crop, he said.

“In the short term, it’s pretty bleak right at the moment. We’ve seen what happens from a farmer perspective when there’s no demand for our product,” Kirwan said. “You (have) the deterioration in the commodity price, and when you couple that with no demand – it’s really creating some very unprofitable times right now.”

One ray of hope is that some ethanol plants can convert to making sanitizing products and even consumable alcohol, Kirwan said.

“There’s an ethanol producer down in the central part of the state around Peoria that already was making high-grade or high-high grade alcohol out of corn for the drinking markets and sanitizing markets,” he said. “They were already set up to do it. But some of these other plants that were just geared for making ethanol for the gas industry and fuel industries … some of those can and some of them cannot switch over.”

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