The ethanol industry absolutely is not slowing down because of the flood. So says Monte Shaw, executive director of the Iowa Renewable Fuels Association, which represents the largest volume of ethanol production by state.
All of these media stories about the flood killing the biofuels industry "is the speculators talking,” says Shaw. He is referring to the rash of mainstream media stories highlighting delayed startup of new plants and canceled ethanol projects. Some say the Midwest flood, potential poor corn crop and high corn prices are causing a slowdown in the industry.
“Sure there are facilities that have completed and will not start up, and obviously they have their reasons, but you can't just say it's because of the flood. Each plant has a different debt load, different contracting and a different hedging plan than others.
“Of course if plants went and bought spot corn and tried to turn it into ethanol, they would lose money today,” says Shaw. “But that’s just not happening.”
As for the people who say the U.S. needs to change public biofuels policy in preparation for a bad corn crop, Shaw says simply this: “That is asinine.”
“You can’t take what is happening on July 1 and predict what the corn crop is going to be this fall. If we have favorable weather the rest of the way out, it could be our third best crop ever,” he says.
“So before we start changing public policy that is supposed to guide us over decades, let’s see how this crop year turns out,” Shaw says.