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Midwest flooding affecting ethanol production and gas prices

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March flooding throughout the Midwest caused shortages of ethanol as production was reduced, with threats of more flooding on the way. The decreased ethanol production is also fueling the increase seen in gas prices, as ethanol prices on the coasts spiked due to shortages.

Midwest producers have been unable to take advantage of the price increase because of washed-out rail lines. In Southern California, including Los Angeles, the ethanol shortages are one of the factors that are pushing gas prices towards $4 a gallon, a level not seen since 2014.

The multi-billion-dollar damages in March impacted farms, homes, and infrastructure, as well as cutting ethanol production by 13 percent. The biggest problem facing the industry, getting ethanol to market, will continue as repairs are made to railways and U.S. ethanol inventories rise to near record levels.

Additionally, storms across the Midwest and Great Plains threaten further flooding, further impacting plants and the transportation systems they rely on.