The Free Press, Mankato, MN

State, national news

February 10, 2013

Corn shortage idles 20 ethanol plants nationwide

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"I cannot see any profitability in this industry until we get lower corn prices, and it's going to take a reasonable-sized U.S. crop," Hurt said.

Officials at the nation's leading ethanol makers — Archer Daniels Midland and POET — declined to speculate about whether additional plants will close. POET spokesman Matt Merritt said producing ethanol at Macon became cost-prohibitive because of the lack of available Missouri corn, and shipping it in was simply too expensive.

Cooper said most of the idled plants expect to restart production — just not anytime soon. Corn is expected to remain scarce and expensive at least until the 2013 crop is harvested, starting in late August and into September. Cooper believes ethanol production won't resume at most plants until then.

For now, many of the plants remain open with workers doing maintenance or helping to modernize the facilities while they wait for production to resume, Cooper said.

Only one of the closed production facilities, an ADM plant in Wallhalla, N.D., may be closed for good, Cooper said.

"Generally the industry is optimistic," Cooper said. "We're just going through a rough patch here."

Not everyone associated with the industry is that optimistic.

Brian Baalman farms near Menlo, Kan., typically growing 8,000 acres of corn each year. Last year's crop was about one-third of that. This year, he may plant only the one-third of his acreage where irrigation is available this summer.

Like many growers, Baalman has a direct interest in ethanol. He is on the board of Western Plans Energy in Oakley, Kan., and has stock in seven ethanol plants. He said near-record prices for corn, driven up by the drought-fueled shortage, are making ethanol production costs too high.

"We are burning up all our excess cash just to stay running at a reduced rate to keep people working and keep the people there, keep the lights on, so to speak," Baalman said. "It's very tough right now."

"A lot of these ethanol plants aren't going to make it," Baalman said.

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AP reporter Roxana Hegeman in Kansas contributed to this report.

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