World Grain - May 2020 - 29

AGRICULTURE INDUSTRY
WEATHERS COVID-19 STORM

Ethanol industry gutted as demand plummets;
feed industry searches for alternative ingredients
by Susan Reidy and Arvin Donley

28

A

s the coronavirus (COVID-19) pandemic stretches from weeks into months, multiple segments
of the global agriculture industry are reeling.
The US ethanol industry is expected to lose $10 billion this year and meat processing facilities are being
forced to shutter due to illness while countries such as
Ukraine and Russia are limiting grain exports.
The closures and production slowdowns are rippling on to those further down the supply chain, such
as feed manufacturers who now must search for alternatives for DDGS, an ethanol co-product, and rendered byproducts.
Other supply issues and infrastructure concerns have
been addressed for the short term as government policies change to make allowances for heavier trucks and
licensing requirements. As planting gets underway in
WKH 1RUWKHUQ +HPLVSKHUH R൶FLDO HVWLPDWHV DUH VWLOO
calling for near-record crops though there are concerns
should the illness impact a large number of farmers.
Still, the global grain industry is in a good position
to help feed the world during this expanding pandemic

that, as World Grain went to press in early May, appeared to have no end in sight. The world is in a much
better grain stocks position than it was during the last
major economic crisis, the Great Recession of 2008-09.
"We have rather ample stocks at multi-year highs,"
Josef Schmidhuber, deputy director of the United
Nations' Food and Agriculture Organization (FAO)
trade and market division, said during an April 17 webinar sponsored by Global Grain. "We have to be careful making statements that we are drowning in stocks,
but overall, compared to 2008-09, we have twice as
high of stocks at absolute levels."
ETHANOL HIT HARD
One of the hardest hit segments is the ethanol industry,
which in the United States is expected to lose $10 billion in sales this year as stay-at-home measures and an
oil glut have dramatically reduced fuel consumption.
1HDUO\  RI SURGXFWLRQ LV R൷LQH DFFRUGLQJ WR DQ
analysis by the Renewable Fuels Association (RFA).
Roughly half of the ethanol industry is shut down
May 2020 / World Grain / www.World-Grain.com

©AK-DigiArt - stock.adobe.com

The US ethanol
industry is
expected to lose
$10 billion in sales
due to stay-athome measures
and an oil glut.


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World Grain - May 2020

Table of Contents for the Digital Edition of World Grain - May 2020

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World Grain - May 2020 - 2
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