When the coronavirus pandemic started, one notable impact was on fuel prices and ethanol production.
With many consumers on lockdown across the country, travel dwindled and so did the demand for fuel, forcing many ethanol plants to limit or even halt production. That led to a few other Midwest terminals seeing a boost in business.
“They went through a period of time where gas usage slowed their ethanol demand,” said Jeff Ferguson, who works with Consolidated Grain and Barge Co. in Colusa, Illinois. “They backed out of the market for a period of time and we were able to increase our business a bit on the river because of that.”
With Colusa located near the tri-state border of Illinois, Iowa and Missouri, loading barges is a big part of their business, Ferguson said, and despite COVID-19, business has been running steadily on the Mississippi River.
“The only thing that really changed was a drive-through pickup for checks and contracts,” Ferguson said. “We handed out at the window rather than allowing clients to come in the offices. That didn’t really inconvenience them much at all.”
Along the Missouri River, it was also business as usual. Clint Boon, grain originator with Ray-Carroll County Grain Growers in central Missouri, said the only major change they’ve seen in the company is the need to social distance and have multiple employees work from home.
While Ray-Carroll hasn’t seen a big bump in outside traffic coming into their operation, Boon said their rail transport operation has been running very smoothly.
“It’s been a really seamless transition for us,” Boon said. “We had a few people working from home, but with technology that hasn’t been a problem either. We are a food business, so we are essential.”
The “business as usual” mindset can be seen by farmers hauling their crop in as well.
Mark Recker, a farmer in Fayette County, Iowa, said hauling his crop to the river doesn’t take much face-to-face contact anymore anyway.
“It’s all automated,” he said. “You don’t really see anybody face-to-face. Maybe you have to enter some information on a keypad, which they don’t do much anymore because of fear of contamination, but other than that, they automatically send you your scale ticket at the end. There hasn’t been much face-to-face contact.”
While Recker said the lower fuel prices did help some factors of the bottom line, it is also important to look at the bigger picture when it comes to ethanol prices and how that affects farmers. If fuel prices are lower, that is going to impact demand for their crop.
“We all understand that lower gas prices also means lower ethanol usage,” Recker said. “That is not good for us as producers at all.”
Both Boon and Ferguson noted they expect big seasons of new crop coming into their locations this fall. For Boon, who sits on the Missouri River bottom, he said it is a welcome change from last year.
“Last year, we lost around 150,000 acres,” Boon said. “We’ve planted 90% of that this year, so it’s a lot better. We’ve had some spotty rains and our crop conditions on a scale of 1 to 10 are a 9.”