Tag Archives: Demand

Some rain in the western corn belt.  Rains were wide spread across the corn belt. Crop progress out this afternoon.  Weekly export report showed some strong numbers for corn, but soft for beans.  Livestock, doesn’t have anything outstanding on the cattle on feed report.  How is consumer demand going, with weather & restaurants starting to reopen.  boxed beef prices averaged the lowest the market’s seen since the week of April 11.  China and trade deal work-banning poultry from Arkansas & Tyson.  Hog market sees week cash

 

A new report from CoBank’s Knowledge Exchange says the ethanol industry may have to diversify itself in the future. The report says excess production capacity and reduced demand will force the U.S. ethanol industry to “transform its business model to create more value and improve its operational efficiency.”

CoBank predicts that consolidation within the industry will lead to larger and more financially stable companies with diversified ethanol co-product offerings by 2025. “While ethanol remains an attractive business with long-term potential, the industry will need to evolve and diversify beyond fuel ethanol,” says Kenneth Zuckerberg, CoBank lead grain and farm supply economist. “That diversity will need to include higher-margin co-products like high protein distillers’ grains for animal feed, liquid carbon dioxide for refrigeration, beverage grade alcohol, and other industrial products.

COVID-19 led to businesses shutting down and people staying at home, causing significant ethanol demand destruction. The industry had one billion gallons of excess capacity at the start of 2020, with that number projected to rise to 3.9 billion at the end of this year before it settles to 2.4 billion at the end of 2021. Strong export growth would help reduce the excess, but current projections don’t support such an outcome.