A major biofuel producer is no longer purchasing corn at some of its ethanol plants as the industry grapples with slipping demand and more consumers stay at home during the coronavirus outbreak.
POET, based in Sioux Falls, S.D., with 28 facilities across seven states, has “temporarily ceased corn purchases at a number of locations” as the company is “actively evaluating biofuel production levels to reflect falling gasoline demand,” a spokesperson confirmed to Agri-Pulse. The spokesperson did not specify which facilities had suspended purchases.
The news comes as biofuel stakeholders worry about widespread facility shutdowns as oil prices decline and gasoline demand plummets. In a statement, Growth Energy CEO Emily Skor said protecting the jobs at biofuel plants struggling with the current market conditions will be "vital to ensuring that we are positioned to reinvest and rebuild in the months to come.”
Interested in more coverage and insights? Receive a free month of Agri-Pulse or Agri-Pulse West by clicking here.
“The deep plunge in biofuel demand sparked by COVID-19 has generated a perfect storm, adding to the enormous burdens created by a foreign price war over oil, continued trade barriers, and regulatory uncertainty here at home," she said. "Those who have the resources are operating at a steep loss, and some may not survive the current downturn without decisive action by lawmakers."
Last week, Renewable Fuels Association President and CEO Geoff Cooper said analysis expect a demand drop of “20 to 25% drop in the near term.”
According to the company, POET purchases 5% of the nation’s corn and produces 2 billion gallons of ethanol when running at full capacity.
Story updated to include additional reaction.
For more news, go to www.Agri-Pulse.com.
