POET announced it will idle production at its bioprocessing facilities in Chancellor, S.D., Ashton, Iowa, and Coon Rapids, Iowa, and delay the start-up of its new plant in Shelbyville, as producers across the United States continue to grapple with the economic fallout of the ongoing COVID-19 pandemic.
On an annualized basis, these operational changes are expected to reduce corn demand by 110 million bushels, freezing 330 million gallons of ethanol production across the four facilities. POET has also significantly slowed production at other facilities, further decreasing corn demand.
“Across the board, biofuel producers and our partners in the farm community face an unprecedented challenge,” said POET Founder and CEO Jeff Broin. “From day one of this crisis, we have placed the highest priority on protecting the health and welfare of our workers, partners and farm suppliers. At the same time, we are working hard to ensure that every biorefinery remains well-positioned to support a strong and swift recovery once daily life returns to normal. That means responding dynamically to shifting conditions and optimizing production, market by market, as the situation evolves over the next few months.
“Unfortunately, plummeting fuel demand amid the coronavirus pandemic has overwhelmed markets already suffering from continued trade barriers, a foreign price war over oil and regulatory uncertainty here at home. In South Dakota, the crisis has been compounded by one of the worst growing seasons in memory. As a result, POET is taking the difficult step of idling production at our biorefineries in Chancellor, Ashton and Coon Rapids and delaying the start-up of Shelbyville.”
Ethanol producers across the country are slashing production amid the ongoing crisis. Nationally, experts predict a decline in fuel demand of up to 55 percent. If these conditions persist, it will result in an annualized drop in ethanol demand of up to eight billion gallons or 2.7 billion bushels of corn.
“As always, we will continue monitoring the situation closely and working with team members at each plant to stay ahead of market changes as the situation continues to evolve day by day,” said POET President and Chief Operating Officer Jeff Lautt. “We remain optimistic that elected leaders will move ahead swiftly on efforts to shore up the rural economy and deliver relief for struggling families. We are fully committed to protecting the strong, stable biofuel markets that America’s farmers need now more than ever, and we look forward to rebuilding and growing America's agricultural markets.”