How badly is COVID-19 slamming biofuels industry? 30% reduction of ethanol production capacity, nearly half offline in coming weeks?

How long will this last?

“No one fully knows how long this may last or how this may ultimately impact fuel and biofuel demand,” said Growth Energy’s Emily Skor. “Based on some industry analysts’ projections, if current conditions continued for a year and there was a loss of 4-5 billion gallons of biofuel demand, you could see corn losses of roughly 1.5 billion bushels. This situation is constantly evolving but wherever we land on impact, we know that this will serve as not only a devastating blow to the ethanol industry, but to the corn farmers who rely on plants purchasing their corn.”

“The big question that no one can possibly answer right now is: how long will this last?” said RFA’s Geoff Cooper. “With President Trump and numerous Governors telling people to stay at home through April 30, we expect at least another month of dramatically lower gasoline demand. After that, who know? Hopefully, we’ll turn a corner soon and the economy can reopen and people will start returning to their normal routines.”

“So far, most of the plants that have idled production have been able to keep their employees on the payroll, but if this downturn becomes a protracted, months-long episode, it’s going to be difficult for our industry to hold on to those highly skilled, specialized workers—unless we have some federal or state assistance to do so.”

“We wouldn’t want to speculate on the length of time the current uncertainty may last, but a look at the length of time that the various stay at home orders that are in place now gives you an idea of what we should be ready for,” said Donnell Rehagen from the National Biodiesel Board.

Continue reading to find out if they foresee a wave of M&A movement like in 2008-09 and what actions could alleviate the pain for the industry.