Plant Shutdowns Continue to Affect Grain Demand
Temporary plant closures in the ethanol and meat packing industries due to the COVID-19 pandemic will add to grain demand challenges faced by farmers.
Here are some notable shutdowns announced this month:
POET will idle production at its bio-processing facilities in Ashton and Coon Rapids, Iowa, and in Chancellor, South Dakota. The company will also delay the start of its new plant in Shelbyville, Indiana. On an annualized basis, the changes at these four plants are expected to reduce corn demand by 110 million bushels.
Cargill closed a U.S. plant in Hazleton, Pennsylvania, that produces meat for retail grocers.
Other major meat companies, including Tyson Foods, Inc. and JBS USA, said on Monday they shut three facilities that produce pork and beef in Iowa and Pennsylvania.
What this means for the U.S. farmer
The outlook for corn use in ethanol remains grim. And now we are seeing meat packing affected, which would work back to cool feed demand. FBN believes the USDA will reduce demand and increase carryout in this Thursday’s report.
Want access to more insights like this?
This article is excerpted from our daily Market Intelligence newsletter that is delivered toFBN Market Advisory members. With FBN Market Advisory, you'll receive truly personalized tools and reports to support your grain marketing efforts. Get access to market news, straightforward marketing recommendations, basis trend insights and weather reports—all relevant to your operation and geographic location.
Copyright © 2020 FBN BR LLC. All rights Reserved. FBN Market Intelligence is distributed by FBN BR LLC. Contact877-472-4607for more information. For the purposes of quality assurance and compliance, phone calls to and from FBN BR LLC may be recorded.
We do not guarantee customers will receive specific benefits or value from participating in FBN BR LLC; results will vary. The data in this article is being supplied as a courtesy by FBN BR LLC. The risk of trading futures and options can be substantial and may not be suitable for all investors. All information, publications, and reports, including this specific material, used and distributed by FBN BR LLC shall be construed as a solicitation. FBN BR LLC does not distribute research reports, employ research analysts, or maintain a research department as defined in CFTC Regulation 1.71. This article contains information obtained from sources believed to be reliable, but its accuracy is not guaranteed by FBN BR LLC. Past performance is not necessarily indicative of future results.
Disclaimer: Futures and Option trading involves substantial risk, and may not be suitable for everyone. Trading should only be done with true risk capital. Past performance, either actual or hypothetical, is not necessarily indicative of future results.