b'S T R A T E G Y A featured segment designed to help you in the realm of retail seed sales. Ethanol Back in the GameAfter a cut in demand due to the stay-at-home order, the ethanol industry is working on returning to normal.Alex MartinAS EVERYONE HASas the restrictions and status realized, 2020 has been aof COVID-19 has changed, bumpy year for most indus- Its sufficient to say that the rebound, which has beenthe demand for gasoline has tries. Industry demand hasstrong so far, will still take a number of years before wegradually began to increase to been shaken, businesses haveget back to anything that resembles normal life withoutmore than 350 million gallons closedits overall been aa mask. per day in September. hard year.CoBank has seen a similar One industry that was par- trend in their data. ticularly affected, though, wasWhat we concluded in the ethanol industry.Knowledge Exchange. At oneSoybean Markets. In thisJune was that these mass In March, across the globepoint in March and early April,report, he projected what theeventsworking from home, stay-at-home orders werethat production was cut in half.biofuels industry would lookstay-at-home orders, the lack enacted, asking and requir- At that point, we did a deeplike after some of the effectsof mass events and the poten-ing people to not leave theirdive into where things were,of COVID-19 began to pass. tial for an expanded recession homes for anything unneces- where they were likely to goNow, after several months would cause the industry sary. That meant going toand what the industry wouldfrom publishing that article, Ito recover to less than 90% work, going out to restaurantslook like in the next few years. can see that most of the thingspre-COVID production, or even going to visit familyEconomists at Purduewe projected in May actuallyZuckerberg says. Weve seen halted. Most families only leftUniversity saw a similar trend.happened over time sincethat recovery now to about home to go to the doctor orFarzad Taheripour,then, Taheripour says.87%, and this is largely in line the grocery store.research associate professorHe mentions that theywith our thinking. Its sufficient And what did that meanin the department of agricul- were projecting that theto say that the rebound, which for ethanol? tural economics at Purduedemand for gasoline wouldhas been strong so far, will still University, notes that thedrop 50-60% in April and May,take a number of years before Stay-at-Home Means Nobiggest factor into the declineand then it would graduallywe get back to anything that Gas Useage in demand for ethanol pro- move back to normal towardsresembles normal life without According to CoBanksduction this year was certainlythe end of 2020.a mask.Readjustment Today,COVID-19.We were projectingTaheripour says he still Rationalization Tomorrow,The demand for crude oilthat by the end of 2020, theexpects another reduction in ethanol sector outlook, thehas sharply declined due toreduction in demand forethanol demand this year. U.S. ethanol sector experi- reductions in economic activi- gasoline would be less thanMy expectation is that enced a catastrophic demandties, which has led to a large10%, Taheripour says. Actualwe may see another round shock stemming from thedrop in crude il prices, heobservations now confirm thatof reduction in gasoline reduced gasoline consump- says, noting that from Dec. 31,the demand for gasoline indemand, he says. Because tion.2019, crude oil fell from $61.14September was 9% lower thanof that, we may observe some The way weve looked atto $14.10 in March 30, 2020.its level in 2019.reduction in demand for the sector as the year began,Taheripour notes that inIn terms of actual data,ethanol again towards the end ethanol production totaledApril, Purdue published aTaheripour says the demandof this year, as the cold season to be about 16 billion gal- research report called thefor gasoline dropped fromand flu season spreads and lons, says Ken Zuckerberg,Impact of COVID-19 on400 million gallons per daysurges in the COVID-19 cases lead economist of grains andthe Biofuels Industry andto about 200 to 250 millionagain.farm supply with CoBanksImplications for Corn andgallons in April and May, butBecause flu season is still 112/ SEEDWORLD.COMDECEMBER 2020'