ST. LOUIS (AP) — The persistent drought is taking a toll on producers of ethanol, with corn becoming so scarce that nearly two dozen ethanol plants have been forced to halt production.
The Renewable Fuels Association, an ethanol industry trade group, provided data to The Associated Press showing that 20 of the nation's 211 ethanol plants have ceased production over the past year, including five in January. Most remain open, with workers spending time performing maintenance-type tasks. But ethanol production won't likely resume until after 2013 corn is harvested in late August or September.
Industry experts don't expect a shortage — millions of barrels are stockpiled and the remaining 191 plants are still producing. Still, there is growing concern about what happens if the drought lingers through another corn-growing season.
"There's a lot of anxiety in the industry right now about the drought and a lot of folks watching the weather and hoping and praying this drought is going to break," said Geoff Cooper, vice president for research and analysis for the Renewable Fuels Association.
"If we get back to a normal pattern and normal corn crop, then I think the industry is in good shape," Cooper said. "But if this drought persists and it has the same effect on this coming corn crop, then we've got a problem."
America's ethanol industry has taken off in the past decade. Plants in 28 states produce more than 13 billion gallons of ethanol each year, Cooper said. By comparison, in 2002, the industry produced 2.1 billion gallons. Today, roughly 10 percent of the U.S. gasoline supply is made up of the biofuel.
Roughly 95 percent of U.S. ethanol is made from corn. The National Corn Growers Association estimates that 39 percent of the U.S. corn crop is used in ethanol production.
Corn producers had high hopes going into 2012. Record harvests were predicted.
Then the weather dried up. The drought began before planting and never stopped. Even though more acres were planted in 2012 compared to 2011, 13 percent less corn was harvested.
Availability of locally produced corn is vital for ethanol plants since having it shipped in is too expensive. To make matters worse, the drought hit hardest in many of the top corn-growing states. (more...