Supply Is Down, Price Up For Corn For Ethanol Plants

Country Today

The Wisconsin ethanol industry has grown exponentially over the past decade, pumping out more than 500 million gallons of the fuel for the first time in 2011.

But some of that production could soon be in jeopardy as the state’s nine ethanol plants brace for higher corn prices and the possibility that they won’t be able to get enough corn this fall and winter to keep their facilities running at full capacity.

Bob Welch of The Welch Group, a spokesman for the Wisconsin ethanol industry, said he has talked to officials at several in-state ethanol plants, and “they’re all concerned.”

“Everyone is trying to figure out what next week will bring,” he said. “Is the price of corn going to come down? It’s a real balancing act for ethanol plants. They’re all in the same boat.

“I think just as you’re going to see some culling of livestock, you’re going to see some culling of ethanol plants. It’s just bound to happen.”

Welch said he hopes it is a short-term problem and that ethanol plants can weather the storm.

“This industry adds a billion dollars to our economy in Wisconsin each year,” he said. “It’s an important industry. We just have to batten down the hatches and look for the rain clouds.”

Ethanol plants could shut down for a few months and reopen when profit margins improve, Welch said.

“Very few plants have shut down and not reopened,” he said. “Once that infrastructure is there it is likely to be used again.”

To read the rest of Jim Massey’s report please click here.

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