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