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Can ethanol production momentum continue?
The CEO of an ethanol plant in southeast Minnesota is not convinced the rebound in ethanol production is sustainable.
Randall Doyal with Al-Corn Clean Fuel in Claremont says facilities across the country are coming back online as coronavirus-related stay-at-home orders are lifted.
“As soon as the indicators out there said you might be able to at least cover your costs, if not make just a little bit of money, everybody (got back) to producing again.”
U.S. ethanol production has increased five weeks straight.
He tells Brownfield fuel demand appears to be around 80 to 90 percent of pre-pandemic expectations.
“So we’re going to overproduce again pretty rapidly.”
And Doyal is nervous about a resurgence in COVID-19 cases later this year and how the country responds.
“With people learning that they can work from home, there might not be as much demand for commuting and fuel as there was before. So I’m not sure where we wind up out of this, but we haven’t seen the pain from our destruction of the economy yet.”
Doyal echoes others in the biofuels sector who say the industry needs direct government aid to withstand the damage caused by the pandemic, RFS waivers, and the oil price war waged between Russia and Saudi Arabia.
I support the American Ethanol Industry, while I believe our Industry is strong on the Production Side, I think we need to do more on the Consumer Marketing Side. Expanding plants without those same plants also expanding their marketing efforts seems destined to fail.
Why do we think that the consumer market is automatic, and will automatically follow our production? It won’t. I have yet to see any plant expansions also bragging about their expanded marketing efforts. Maybe that is somebody else’s job, but who?
We may be great at producing wagons, but we need to get better at selling them to the final consumer. How and why are our wagons better? Does the consumer even have a clue?
Tom Blazek