The Herald Bulletin

Afternoon Update

Local Business

February 10, 2013

Corn shortage idles 20 ethanol plants nationwide

POET plant in Alexandria continues to operate

ST. LOUIS, Mo. — The persistent drought is taking a toll on producers of ethanol, with corn becoming so scarce that nearly two dozen ethanol plants have been forced to halt production.

The Renewable Fuels Association, an ethanol industry trade group, provided data to The Associated Press showing that 20 of the nation’s 211 ethanol plants have ceased production over the past year, including five in January. Most remain open, with workers spending time performing maintenance-type tasks. But ethanol production won’t likely resume until after 2013 corn is harvested in late August or September. Two plants in Indiana have been idled, but the POET plant in Alexandria continues to operate.

Industry experts don’t expect a shortage — millions of barrels are stockpiled and the remaining 191 plants are still producing. Still, there is growing concern about what happens if the drought lingers through another corn-growing season.

“There’s a lot of anxiety in the industry right now about the drought and a lot of folks watching the weather and hoping and praying this drought is going to break,” said Geoff Cooper, vice president for research and analysis for the Renewable Fuels Association.

“If we get back to a normal pattern and normal corn crop, then I think the industry is in good shape,” Cooper said. “But if this drought persists and it has the same effect on this coming corn crop, then we’ve got a problem.”

America’s ethanol industry has taken off in the past decade. Plants in 28 states produce more than 13 billion gallons of ethanol each year, Cooper said. By comparison, in 2002, the industry produced 2.1 billion gallons. Today, roughly 10 percent of the U.S. gasoline supply is made up of the biofuel.

Roughly 95 percent of U.S. ethanol is made from corn. The National Corn Growers Association estimates that 39 percent of the U.S. corn crop is used in ethanol production.

Corn producers had high hopes going into 2012. Record harvests were predicted.

Then the weather dried up. The drought began before planting and never stopped. Even though more acres were planted in 2012 compared to 2011, 13 percent less corn was harvested.

Availability of locally produced corn is vital for ethanol plants since having it shipped in is too expensive. To make matters worse, the drought hit hardest in many of the top corn-growing states.

Six of the 20 ethanol plants that stopped production are in Nebraska, two in Indiana, and two in Minnesota. Ten states have seen one plant affected. Cooper said the 20 plants employ roughly 1,000 workers combined, but it wasn’t known how many have been laid off.

Valero Energy Corp., idled three plants last year — in North Linden, Ind., and Albion, Neb., in June; and in Bloomingburg, Ohio, in December.

Five plants ceased production in January alone — Abengoa plants in the Nebraska towns of York and Ravenna; a White Energy plant in Plainview, Texas; an Aemetis facility in Keyes, Calif.; and POET Biorefining’s mid-Missouri plant in Macon.

The production stoppages are cutting into ethanol production. The 770,000 gallons per day produced in the last full week of January were the fewest since the U.S. Energy Information Administration began tracking weekly data in June 2010.

That’s not much of an issue for consumers, at least for now, because there are plenty of stockpiles of ethanol. Purdue University agriculture economist Chris Hurt said the nation has more than 20 million barrels of ethanol in stock, slightly more than a year ago, largely because Americans are driving less and driving more fuel-efficient cars. Cooper said, though, that stockpiles are expected to dwindle in the spring and summer as demand picks up and plants remain idled.

Hurt said the ethanol industry needs an end to the drought, a strong corn crop and a drop in corn prices. Corn futures were $5.51 a bushel in May, before the drought’s impact took hold. Prices rose to a peak of $8.34 per bushel in August and were $7.46 per bushel last week.

1
Text Only
Local Business
  • FEA - HB0729 - Senior Falls Aging safely in the comfort of her home Marilyn Moneyhun said being totally reliant on others is difficult. "Losing your independence is a shock to your system," Moneyhun, 84, said. "You are not in control anymore."

    July 29, 2014 1 Photo

  • NWS - HB0728 - business expansion CB Fabricating makes $2 million investment

    A local business founded in 2006 has invested $2 million in new equipment and a building expansion.

    July 29, 2014 1 Photo

  • Charo Boyd: 'My Social Security' simplifies your life So many people buzz through extremely busy and complicated schedules these days. A smartphone in one hand, a computer in front of you, and a digital task list that never seems to end. In addition, to complicate things just a little more, there’s another event you need to add to your list — National Simplify Your Life week.

    July 28, 2014

  • nws - hb0725 - colts - jc - 4.jpg Colts camp's impact: pricey or priceless?

    Football fever is here and the city is flooded with fans eager to catch a glimpse of a favorite player. But officials say they are unclear what kind of economic impact the Indianapolis Colts training camp has on the area.

    July 26, 2014 1 Photo

  • BIZ - HB0727 - Skill gap 2 Seeking a solution today, not tomorrow Tina Warner-Morton says she wants to open her own healthcare business because it is too difficult to work for an employer with unclear employee expectations.

    July 26, 2014 1 Photo

  • BIZ - HB0727 - Cathy Cupboard Biz Profile Business Profile: Cathy's Cupboard focuses on customer satisfaction Cathy McPhearson opened her first storefront in June, but this is not her first venture into business. “I have always wanted to have my own business,” she said. “The problem was finding what people like, but everyone seems to like candles.”

    July 26, 2014 1 Photo

  • IU Health Ball Memorial Hospital named Level III trauma center The Trauma Center at Indiana University Health Ball Memorial Hospital has been verified as a Level III Trauma Center by an ad hoc committee of the Committee on Trauma (COT) of the American College of Surgeons.

    July 26, 2014

  • Clark, Big Joe mug 'Big Joe' Clark: Beat the market or meet your goals? True or not, my experience tells me that goals – especially when written down – undoubtedly serve as catalysts for success. However, danger arises when a goal does not properly focus on the long term result you expect.

    July 25, 2014 1 Photo

  • DSC_8125.JPG Auction teaches in business, farming

    After 10 years of 4-H, saying goodbye to his animals has become a simple matter for McKennon Heald. But he said he wouldn't be surprised to see some tears from some of the younger participants. He's been there.

    July 25, 2014 2 Photos

  • Anderson, Alexandria and Elwood receive grants to tear down abandoned houses Three Madison County cities — Anderson, Alexandria and Elwood — received state grants that will be used to tear down abandoned, dilapidated houses.

    July 25, 2014

Stocks
Hyperlocal Search
Premier Guide
Find a business

Walking Fingers
Maps, Menus, Store hours, Coupons, and more...
Premier Guide