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Plummeting Fuel Demand Hits US Farms as Planting Season Begins

ATLANTA, ILLINOIS - Under a sky of fast-moving clouds, Ron Kindred waits for a break in what has been a steady few weeks of wet weather to begin planting corn and soybeans. The storm clouds over his Atlanta, Illinois, farm are delaying his ability to get seeds into the ground on time, adding to the mounting pressure and uncertainty he faces this year, as Kindred and farmers across the country deal with unprecedented economic headwinds brought on by the coronavirus.

“This could be the worst year we’ve had in a long time,” Kindred said.   Last year he wondered how low soybean prices would go amid a trade war with the biggest market for them – China. This year his biggest concern is how low corn prices will go.

“Corn has become an energy market. It follows the crude oil. It follows ethanol, and ethanol follows crude oil.” Crude oil reached historic lows in April, with trading in negative territory amid a standoff between Saudi Arabia and Russia on production amounts. 

Compounding the issue is that drivers around the world are staying home amid the coronavirus outbreak, reducing demand for corn-based ethanol, which is added to fuel supplies.

In 2018, the United States exported about 1.7 billion gallons of ethanol to more than 80 countries. That amount is expected to drop this year, a troubling sign for U.S. farmers beginning a planting season in the country that produces the world’s largest amount of corn, and ethanol.

While prices have rebounded slightly from historic lows, the record price drop sent a shockwave around the world that extended all the way to Kindred’s rural Illinois farm.

“It’s depressed our corn prices from in the $3.60s to $2.80 now,” Kindred said.

Aliqismet BADALOV,
“Khalq qazeti”

16 2020 11:43 -
2 July 2020 | 15:33
Oil prices on world markets

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