Falling gas demand, rising corn prices prompt ethanol production cuts

Omaha.com
Published Tuesday, July 3, 2012 at 1:00 am / Updated at 5:25 pm


WICHITA, Kan. (AP) — Ethanol makers are cutting production, and some are temporarily idling plants in the Midwest, as corn prices skyrocket and demand for gasoline falls because people are driving less.


More than 95 percent of the nation's ethanol plants use corn starch as their basis for the biofuel. That makes these facilities especially vulnerable to high corn prices in a commodity market nervous about triple-digit temperatures and drought in major corn-growing regions. Most of the more than 200 ethanol plants in the United States are in the Midwest, where most corn is grown.

A glut of the biofuel is squeezing ethanol makers further. The poor economy and high gas prices have people driving less, and ethanol is primarily used in gasoline blends.

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