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General Monon Discussions and Questions => Question and Answers (Q&A) => Topic started by: Pete Pedigo on July 08, 2012, 01:49:12 pm

Title: Ethanol Plant at Linden in the News
Post by: Pete Pedigo on July 08, 2012, 01:49:12 pm

LINDEN, Ind. — Valero Energy Corp. idled its Linden ethanol plant, a decision drive by high corn prices, officials said today. 

The 110-million-gallon plant halted production on Tuesday, a casualty of growing drought conditions that are causing grain prices to skyrocket.

“It’s not profitable to run an ethanol plant because margins are negative,” said Bill Day, executive director of media relations for Valero Energy Corp.

The Linden plant shutdown is the second for Valero since June 19, when its Nebraska facility temporarily stopped operations.

Valero operates 10 plants in the Midwest, Day said, and its website states it is the largest independent U.S. refiner. It purchased the Linden plant in 2010 from VeraSun Energy Corp.

There are about 60 employees at the Linden plant, Day said, all of whom will keep their jobs and continue working full time.

The employees will do maintenance work and other duties until the plant resumes its operations, which Day said he expects will be before the harvest.

An exact date for all plant operations to resume is unknown, he said.

“It depends on the markets,” Day said. “We expect they’ll improve soon.”

The Linden plant buys its corn from a nearby Cargill grain elevator, Day said.

However, if drought conditions continue, corn prices will likely go even higher, said Chris Hurt, a Purdue Extension agronomist.

With July corn futures moving prices to about $6.60 to $6.70 a bushel, old-crop cash corn that Valero needs to resume production should push past $7 per bushel, Hurt said.

“If we go above $6.75 or $6.80 on July futures, then I think we’ve got a real shot at retesting the all-time highs at around $8.”