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Midwest Renewable Energy
The Sutherland ethanol plant is closing until market conditions change and so crews can do thorough cleaning and maintenance, plant manager Troy Gavin said Friday. Gavin hopes the plant will reopen in a month or two, at most.
“We need to work through stockpiles and get closer to the driving season,” he said.
Although the price of gas is going ever higher at the pump, the price of ethanol is not.
E-10 regular gas sold for $3.45 a gallon Friday in North Platte, compared to $3.05 in late December.
But the price of ethanol is just $2.05 a gallon, Gavin said.
Also, the price of corn is $6.50 a bushel – an historically high price.
There is lots of ethanol in storage, Gavin said, thanks ironically to a federal excise tax credit for ethanol blending that expired Dec. 31.
Oil companies, faced with the end of their tax credit, bought lots of ethanol late in 2011 to take advantage of as much credit as possible, Gavin said. With full storage tanks, oil companies can bid less for ethanol -- if they are buying it at all.
Also, winter weather causes motorists in the U.S. to travel less, another contributing factor. Motorists have also cut back on fuel due to high prices. Most gasoline refineries are operating at 70-75 percent of capacity, Gavin said.
The Midwest Renewable Energy plant employs 35 full-time workers. About a third of them will stay on the job to clean, repair and upgrade the plant. The rest will be temporarily laid off.
“We are going to take everything apart and clean it, inside and out,” Gavin said. “We normally do our annual maintenance in April or May. We’ll do it a little early this year.”
A plant representative will help feedlots in the area find other places to buy grain byproducts that have become a staple in cattle feeds, Gavin said.
“We are going to help our customers out to every extent that we can,” he said.
The plant has been manufacturing nearly 27 million gallons of ethanol a year, up from 15 million gallons a few years ago.
It is in a prime spot, geographically and strategically, on Union Pacific's main railroad line with good access to California, Oregon, Washington State and the Front Range.
"We have a great corn supply, a great labor force and good outlets for byproducts to feedyards,” Gavin has said.
Some other ethanol plants are cutting back or shutting down.
Omaha-based ethanol producer Green Plains Renewable Energy reported a $2 million drop in net income in the fourth quarter of 2011 compared to a year ago.
The company reported that net income for the fourth quarter was $14.3 million, down from $16.4 million, during the same period in 2010.
Archer Daniels Midland will permanently close its ethanol plant in Walhalla, N.D. in April, resulting in the loss of 61 jobs.