Midwest Flooding Causing Hit to Ethanol & Biodiesel

John Davis

Flooding in the Midwest is dealing a hard blow to ethanol and biodiesel production on two fronts: 1. direct production of the green fuels, and 2. feedstock production.

This story from the Truth About Trade & Technology web site says the high waters have shut down several plants in flood-ravaged Iowa:

At least five small to midsize ethanol plants have shut down recently, according to David Driscoll at Citigroup, who declined to disclose the names of the plants. He warned that these closures are the “tip of the iceberg.”

The Iowa Renewable Fuels Association said Friday the flood has caused 300 million gallons of ethanol production, on an annual basis, to be forced off line and that could quickly grow to 400 million gallons.

In addition, the high water is putting corn fields under water, putting the most popular feedstock for ethanol at risk. That is also forcing already-high corn prices even higher, cutting into tight margins on ethanol production. Soybean fields across the Midwest are also too wet, having similar results on soybean oil used to make biodiesel.

Biodiesel, Ethanol, News