Illinois producer B.T. Carmichael sells 90% of his crop to the CHS ethanol plant in Rochelle, Ill. > By April 2020, more than half the nation’s ethanol production capacity was halted and total output in 2020 hit a seven-year low, according to the Renewable Fuels Association. annually and 90% goes to the CHS Rochelle ethanol plant. “The two CHS ethanol plants in Rochelle, Ill., and Annawan, Weathering the Storm With nearly 40% of corn produced in the U.S. going to renewable fuel, farmers felt the change. “Everything shut down as far as ethanol demand,” says B.T. Carmichael, an Illinois producer who grows mostly corn on 4,000 acres with his father, Jim. “Our industry relies on ethanol and without it, we don’t have a spot for all our corn.” Carmichael works with CHS grain originator Steve Meisch, based in Elburn, Ill., to fi nd the best corn market opportunities. The farm produces about 750,000 bushels of corn “When gas demand changes, ethanol demand goes right with it.” — Eric Brandt Ill., are in perfect spots,” says Meisch, who has worked with Carmichael for about fi ve years. “With Chicago nearby and large cities to the east, we continued to have a market for ethanol even through demand declines.” By summer 2020, the ethanol market began to see increased demand as lockdowns were lifted and summer travel took place largely by car. That demand held through the fall, and by April 2021 the ethanol market was running at 95% capacity. The two CHS plants were able to meet the recovering demand because they kept running all spring, even while many plants shut down. “We continued running our CHS ethanol plants, although at a reduced rate, which helped us recover and get back up to speed quickly,” says Brandt. “Because the Rochelle plant stayed open, we were able to keep moving our corn,” says Carmichael. “This fall, the markets perked up and we were able to get a decent price for our crop.” for ethanol production was down 10% from 2019 due to reduced blending and higher corn prices, according to the USDA. “Corn prices closely follow what’s happening in the ethanol market,” says Brandt. “When there’s tightness in the corn market, we typically see higher prices in ethanol. And when there’s an abundance of ethanol, we see lower corn prices.” In July 2020, corn hit its lowest price in 15 years. Market Options In 2020, U.S. corn volume used “Our industry relies on ethanol and without it, we don’t have a spot for all our corn.” — B.T. Carmichael CHSINC.COM 8 SPRING 2021