Ethanol demand: a long, hard road to recovery

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Ethanol demand: a long, hard road to recovery

A University of Illinois ag economist says he does not expect a bounce back from ethanol demand destruction anytime soon.

“I think it’s going to be a long, hard road to recovery.”

Todd Hubbs tells Brownfield COVID-19 related stay at home orders have dropped ethanol production by nearly 50%. Hubbs says demand should gradually increase as restrictions are lifted but he anticipates summer gasoline demand will still be far below normal.

Looking at corn prices, he does not expect them to drop much further from low ethanol and livestock feed demand, but a large 2020 corn crop would raise stocks significantly and that could negatively impact corn prices

“If we plant 97 million acres and we are staring at 17.6 billion bushels or more of corn , if you add another 2 billion bushels or more onto that, we are going to be carrying a lot of corn around.”

He says ethanol producers were proactive in reducing their production which should save them from experiencing negative prices like the oil industry.

Interview with Todd Hubbs

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