Coronavirus and ethanol: fuel and booze

Coronavirus affects everything in the food system.  Here’s what it’s doing to ethanol and alcoholic beverages.

Fuel ethanol

Q.  What does fuel ethanol have to do with food politics?

A.  About 40% of America’s corn crop is used for ethanol for cars, as a result of the fuel standards law requiring ethanol to be blended into gasoline.

Comment: Growing corn for ethanol seems absurd to me, particularly because the energy gain is so low—about 2% according to the USDA.

With that said, Covid-19 is unquestionably bad for the fuel ethanol business.

• Ethanol plants are in trouble.  People aren’t driving cars as much or using gas.
• Only about half as much ethanol is being used as was used last year—the lowest since 2010.
• The USDA is not providing emergency funding for biofuels.
• Corn farmers are upset.  There is less of a market for their overplanted corn.

Booze

Alcoholic beverage companies that donate to Coronavirus causes are seeing huge increases in sales—as much as a tripling.

But beer has a problem.  It—and sodas and seltzers—need carbon dioxide gas to make them bubbly.  Ethanol plants collect this gas as a byproduct.  If they shut down or reduce output, the gas supply goes down.  Expect shortages.

If Covid-19 does any good at all, it is to illustrate the interconnections and contradictions of our often bizarre food system.