Stay-at-home orders across the country, and here in Michigan, are being lifted. That means more people are out on the roads.
“That’s a good thing for the ethanol industry,” said Jim Zook, executive director of the Michigan Corn Growers Association.
From late-March to April, there was a 50 to 60 percent drop in fuel usage. Now, ethanol is rebounding, as is the crude oil market.
“We’ve seen a recovery in the crude oil price as well that’s helping the demand for ethanol,” said Zook.
Zook added it’s difficult to pinpoint how long it might take for ethanol prices to fully recover to a pre-COVID level.
“If we do get back to normal, we get confidence back, maybe we get to the point where maybe we haven’t lost as many jobs and those jobs come back, we’re allowed to go out to eat, I think it will help,” he said. “The quicker we get to that, instead of this being a U-trough where it’s a little bit longer [recovery], maybe it is a V and we bounce off the bottom and start back up. Time will tell.”
On Monday, Gov. Whitmer lifted Michigan’s stay-at-home order, which Zook mentioned will give optimism to Michigan’s corn producers. Four of Michigan’s five ethanol plants are still operating as recovery from COVID is underway.
“There were two that slowed down the last part of April,” said Zook. “There’s some others that slowed down, some switched and started producing hand sanitizers. Right now, they’re all back up and running. Maybe not at full capacity, but at least they are operating, and they are buying corn again.”