WEST BURLINGTON, Iowa — With people staying at home and less traveling on the road, the ethanol industry is seeing the worst crisis in history. Those in the business say one-third of ethanol plants in the country are shut down, while others are running at a reduced rate.
"The industry and Big River, we are seeing a 50% reduction in ethanol," says Jim Leiting, CEO of Big River Resources LLC.
As the demand for ethanol shrinks, Leiting says Big River's West Burlington plant is operating at one-third it's capacity.
"This plant has the capacity to operate at 112-million gallons a year," says Leiting. "Today, we're operating at a 40-million gallon rate."
The West Burlington plant typically sees about 300 trucks a day come through toward the end of April, but this year it's closer to 100 according to Leiting.
"It's likely as the market continues to fill we might actually shut the operation down for a period of time," Leiting admits.
A shut down is something the West Burlington plant has never seen before, and Leiting says it will hurt farmers.
"It becomes a severe issue as they have corn from last year and they're planting another crop that they have a market for that crop," Leiting explains.
"The prices we receive right now are below the cost of production," says Dave Mueller, a corn and soybean farmer in Taylor Ridge, Illinois.
Right now it costs Mueller more to raise a bushel of corn than to sell it on the market.
"There is just a big unknown," says Mueller. "We don't know when demand will pick up, when we'll start driving again."
But whether the market is ready or not, Mueller says now is the time to plant his 560 acres of corn - when ground conditions are ideal.
Leiting says there will be about 500-million to 1-billion bushels of corn that won't be consumed this year, which will continue depressing oil prices.
Big River says they will shut down operations at their Wisconsin location for the month of May, as well as their Dyersville location for two weeks next month.