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Corn Growers and Livestock Groups Hit Hard by Reduced Production of Ethanol

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CEDAR RAPIDS, Iowa — The ADM corn dry mill plant in Cedar Rapids announced Friday it is reducing production of ethanol, citing a “challenging operating environment” during the COVID-19 pandemic. It also announced plans to furlough about 90 employees for the next four months.

That impacts the Iowa Corn Growers Association, which said four months is too long.

“For the financial health of the ethanol industry, any day that the industry is shut is really detrimental to not only to ethanol as a business but also to the corn growers who supply their corn,” Iowa Corn Growers Association CEO Craig Floss said.

Floss said the impact of shutting down ethanol plants, even for a short period of time, has a great effect on corn growers as they are currently planting new crops with no market to sell them to.

“We’ve got a new crop that’s being planted as we speak. The concern is we have a carryover of corn that is available now to go to market and we’re planting a new crop and at the moment those projections are a very significant number of acres that will be planted again this year, so we’re compounding the situation with more corn coming on,” Floss said.

He said slowing ethanol production also has an impact on livestock groups that rely on the distillers’ grains that come out of the ethanol production process.

“There’s a ripple effect that occurs, that’s been occurring now, and we have almost nationally 50% of the ethanol industry either shut down or significantly curtailed. What that means is the market that was available for corn growers to take corn to the market now no longer exists,” Floss said.

He said the slowdown of ethanol is due to the decrease in the global demand for fuel. He says once that demand increases, ethanol plants will be able to open up once again.

“There is one bright spot in that we have been able to ship ethanol from an export perspective overseas. We have a number of Asian countries that are beginning to utilize more ethanol to clean up their air. That of course though has also slowed because of their lack of driving. But as they start to open up, we are seeing the markets open up just a bit,” Floss said.

The ADM plant said it will divert production to products that are in higher demand such as hand sanitizer.

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