The Biofuel Industry Is Really Struggling Right Now

The various measures taken to attempt to curtail the spread of COVID-19 have taken their toll on agriculture in a variety of ways.

Some of these are obvious, like not getting enough farm labor, restaurants shutting down, or the increasing risk of the virus spreading amongst food production workers. But there are also secondary issues, and one of those is a huge problem for American agriculture: biofuel.

The biofuel industry, which eats up about 40 percent of American corn production, has had a rough go of it under the Trump administration for the past couple of years. Refineries have been granted waivers in unusually high numbers, enabling them to simply not bother purchasing corn from farmers. But that pales in comparison to the essential problem of Americans simply not driving as much.

The near-universal shutdown of non-essential offices, along with orders (both explicit and suggested) to stay at home, has meant that people are not driving as much. Even major cities with typically infuriating traffic are experiencing wide open, empty roads.

With demand at such a dramatic low, production has come to a standstill. Roughly four billion gallons of ethanol have not been shipped due to lack of demand since the beginning of March. Plants themselves are closing up shop, at least in a few cases, due to the cost and difficulty of operating. Pacific Ethanol, one of the biggest ethanol producers in the country, says 60 percent of its ethanol is “idling,” essentially sitting around in the factory; the company has shifted focus to making hand sanitizer.

In response, 15 senators from both parties sent a letter to USDA Secretary Sonny Perdue, asking for more money to be allocated specifically to biofuel producers. Representatives of the biofuel industry penned their own letter, asking for the same thing.

The United States is easily the largest producer of ethanol in the world, producing nearly 17 billion gallons per year. A near-total halt in transportation is very, very bad news for farmers who rely on that market for their corn and soy.