A new study by university economists finds ethanol producers will experience roughly $8 billion in losses this year due to the pandemic’s impact on world fuel markets. The study, conducted by economists from the University of Florida and Arizona State University, was published recently in the Journal of Agricultural and Food Industrial Organization.
The estimated economic loss grows to a range of $7.9 to $8.6 billion when unemployment effects are included. The study acknowledges that those estimates likely “understate the cost of COVID-19” to the ethanol industry because the impact of the pandemic on co-product output, demand and prices is not included.
Renewable Fuels Association President and CEO Geoff Cooper says the new study confirms the findings of an RFA analysis published in July, which found pandemic-related losses could be $7 billion or more in 2020. According to RFA, the study also underscores the importance of ensuring ethanol producers are not again left out of any stimulus package that may move forward in the weeks ahead.