POET announced it is idling ethanol plants in South Dakota and Iowa and delaying startup of a new plant in Indiana. Vice President of Corporate Affairs Doug Berven says the combined production at the plants will mean demand destruction of over 100 million bushels of corn.
Berven says the company is one of many trying to navigate the fallout of an oversupplied ethanol market from the COVID-19 pandemic and lower fuel demand, plus the huge drop in crude oil prices in response to the OPEC price war. As a result, he says it is unclear how long the three ethanol plants will be offline. because
POET is the largest ethanol producer in the U.S. and operates 27 plants. Berven says they haven’t determined if they will have to idle any additional facilities in the future but have already altered or cut production and corn-buying activities in other areas.
Berven says this was a difficult decision for the company, but they will be ready to re-launch when the threat subsides and market conditions improve. He says this is a real hit to the rural economy.
