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Plummeting Fuel Demand Hits US Farms as Planting Season Begins

Kane Farabaugh

   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.

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