Ethanol recovery threatened by rising restrictions

November 23rd, 2020 | Kinsey Senkel

U.S. ethanol production has been a big source of demand for domestic corn. However, COVID-19 sharply curbed global fuel consumption.

In recent weeks, Reuters says output has chipped away at its deficit versus prior years. However, the resurgence of COVID and increasing restrictions, especially just before the holiday season, threaten to halt a comeback in fuel demand before it can ramp up.

The U.S. Energy Information Administration says fuel ethanol output for the week ending on November 13 totaled 962,000 barrels a day, down 1.5 percent from the previous week, which had the highest production level since the week ending on March 20. The last three weeks have been the most productive for American ethanol makers since March.

The EIA says seasonal trends are part of the reason why the output is rising. However, when compared with previous years’ production levels, it shows that output is rising out of its COVID slump, though the pace is still slow.

The four-week output rose to 960,000 barrels per day through last Friday, down just over eight percent compared to the same period in the previous three years. USDA says corn use for ethanol will be 5.05 billion bushels, up four percent on the year, but down 7.7 percent from the three-year average.

 

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