POET idles ethanol production at three facilities and delays start-up of fourth
In the United States (US), POET LLC, the world's largest corn ethanol production company has announced that it will idle production at its bioprocessing facilities in Chancellor, South Dakota (SD), Ashton and Coon Rapids, Iowa (IA), and delay the start-up of its new plant in Shelbyville, Indiana (IN), as producers across the US continue to grapple with the economic fallout of the ongoing coronavirus (COVID-19) pandemic.
On an annualized basis, these operational changes are expected to reduce corn demand by 110 million bushels (≈2.79 million tonnes), freezing 330 million gallons (≈ 1.25 billion litres) of ethanol production across the four facilities. POET has also significantly slowed production at other facilities, further decreasing corn demand.
Across the board, biofuel producers and our partners in the farm community face an unprecedented challenge. From day one of this crisis, we have placed the highest priority on protecting the health and welfare of our workers, partners and farm suppliers. At the same time, we are working hard to ensure that every biorefinery remains well-positioned to support a strong and swift recovery once daily life returns to normal. That means responding dynamically to shifting conditions and optimizing production, market by market, as the situation evolves over the next few months, said POET Founder and CEO Jeff Broin
POET currently has a network of 28 production facilities across seven US states. At full annual run rates, POET purchases 5 percent of US corn and produces 2 billion (US) gallons (≈ 7.57 billion litres) of ethanol.
Unfortunately, plummeting fuel demand amid the coronavirus pandemic has overwhelmed markets already suffering from continued trade barriers, a foreign price war over oil and regulatory uncertainty here at home. In South Dakota, the crisis has been compounded by one of the worst growing seasons in memory. As a result, POET is taking the difficult step of idling production at our biorefineries in Chancellor, Ashton and Coon Rapids and delaying the start-up of Shelbyville, said Jeff Broin
Ethanol producers across the country are slashing production amid the ongoing crisis. Nationally, experts predict a decline in fuel demand of up to 55 percent. If these conditions persist, it will result in an annualized drop in ethanol demand of up to eight billion gallons (≈ 30.28 billion litres) or 2.7 billion bushels (≈ 68.58 million tonnes) of corn.
As always, we will continue monitoring the situation closely and working with team members at each plant to stay ahead of market changes as the situation continues to evolve day by day. We remain optimistic that elected leaders will move ahead swiftly on efforts to shore up the rural economy and deliver relief for struggling families. We are fully committed to protecting the strong, stable biofuel markets that America’s farmers need now more than ever, and we look forward to rebuilding and growing America’s agricultural markets, said Jeff Lautt, President and Chief Operating Officer at POET.