ADM ethanol production sinks 21%

Oil’s price crash and the general down economy sends overextended ethanol producers reeling.

CHICAGO (Reuters) — U.S. ethanol producer and grain processor Archer Daniels Midland Co. said Tuesday nearly 21% of U.S. ethanol production capacity has been shut due to weak demand and poor margins.

U.S. ethanol plants with a production capacity of 10.2 billion gallons per year are currently operating, down from a peak of 12.9 billion sometime mid-to-late last year, ADM Executive Vice President John Rice said on a conference call with analysts.


U.S. capacity to make the alternative fuel skyrocketed last year as companies raced to build plants amid generous government incentives designed to begin to reduce the country’s dependence on oil imports.

The oil-price crash and credit crunch, however, proved too much for some producers. Many also have struggled with volatile prices for corn, from which most U.S. ethanol is made.

Reuters