Grainnet

With corn futures prices continuing its march above $7/bu, VeraSun announced June 16 it is delaying the start-up of its two ethanol plants in Minnesota and Iowa until market conditions improve.

The 110-million gal/yr ethanol plants in Welcome, MN, and Hartley, IA, were expected to begin operations by the end of the second quarter, but last week company officials opted to delay bringing the two ethanol plants on line, VeraSun spokesman Mike Lockrem confirmed.

"The margins between where ethanol is currently selling and higher corn prices do not warrant starting up these two facilities at this time.

"We will monitor the market on a daily basis, and will put these two biorefineries into production when market conditions become more favorable," he added.

Both ethanol plants are near the completion of the construction phase, Lockrem added.

VeraSun, which recently held a ribbon cutting ceremony for its 110-million gal/yr ethanol plant in Albion, NE, has more than 1 billion gallons of annual ethanol production capacity through its 11 plants.

High soybean prices have caused numerous biodiesel plants to halt or delay production and now it seems those same concerns -- with corn prices -- have carried over to ethanol producers.

Last week, a Citigroup analyst reported that small and mid-sized ethanol producers have been among the hardest hit by the rise in corn prices, with ethanol producing margins for them swinging into negative territory.

"In support of this view, we have learned that in recent days, at least five small- to-mid-size ethanol plants have shut down due to poor margins.

"Importantly, this appears to be just the tip of the iceberg..." wrote Citigroup analyst David Driscoll.

For more information, call 732-730-2532.

See Related Websites/Articles:

• VeraSun
• Oil Price Information Service

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