Supply-Demand Crunch Pinching Ethanol Industry

By: Associated Press
By: Associated Press

Falling fuel demand, an ethanol oversupply and high corn costs could lead some Midwest biorefineries to cut back or idle production until profit margins improve.

A Midwest Renewable Energy ethanol plant in Nebraska is halting production for a period of up to eight to 12 weeks because of the supply-demand imbalance.

General Manager Troy Gavin says the industry went from some of the best margins it has seen to some of the worse in 30 to 45 days.
He says production will resume when conditions improve.

The Energy Information Association says ethanol stocks as of Feb. 3 have climbed to an all-time weekly high of 21.1 million gallons.

DTN industry analyst Rick Kment says much of the lackluster fuel demand is seasonal, as drivers travel fewer miles during winter months.

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