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smokeyjay
Posts: 954
Registered: ‎05-11-2010
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Ethanol company suspends operations

Received this from a friend, Greg Akagi, journalist for WIBW, Topeka.

 

East Kansas Agri-Energy to Halt Production  GARNETT, KS--East Kansas Agri-Energy, LLC in Garnett, KS recently announced plans to temporarily suspend production operations beginning October 1st, 2012. The company cited the prolonged drought conditions as having a negative impact on availability of corn and rising feedstock prices as the main reasons for the halt of production. Additionally, the demand for gasoline is down resulting in surplus ethanol stocks. These challenges led to the Company to reduce plant production capacity by 20 percent on April 1, 2012. ...
 
Bill Pracht, Chairperson of the board said, "We have studied the situation extensively and with the challenging economic conditions the Board of Directors has determined that it is in the best interest of the company and its shareholders to halt production at this time." "We will monitor the situation with the hope to resume production of the facility as soon as market conditions allow," Pracht added.
 
The company employs 35 people and a portion of the staff will be impacted by this decision. Pracht also added, "Every effort will be made to treat our employees as best we can, many of our employees have been with the company since the plant opened. Knowing the impact that this decision has on our communities and families made the decision even more difficult." East Kansas Agri-Energy formed in 2001 to construct and operate an ethanol plant and began producing ethanol in 2005 producing 42 million gallons per year annually.
 
Which now begs the question why gasoline is rising, with demand down and the economy sluggish.  Anyway, the rationing of crops has already begun, at least in my neck of the woods.
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roarintiger1
Posts: 1,498
Registered: ‎04-29-2011
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Re: Ethanol company suspends operations

[ Edited ]

Not the first and not the last to do this.  However, there will be ethanol plants that continue to operate. 

BTW, somebody is gonna have to do without corn.......this is a start.

"Failing to prepare is preparing to fail." "Success happens when preparation meets opportunity"
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docharing
Posts: 135
Registered: ‎05-14-2010
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Re: Ethanol company suspends operations

Why anyone would open an ethanol plant in Kansas? Isn't Kansas wheat territory? In Ohio our Ethanol plant is running at full capacity, can't make enough and paying more for corn than anyone else. Kansas ethanol plant closing...no big surprise!

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smokeyjay
Posts: 954
Registered: ‎05-11-2010
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Re: Ethanol company suspends operations

Believe it or not, we grow a lot of corn for a state known to grow wheat.  Not like an "I" state, but acres and bushels are growing.  This plant is located in the eastern part of the state where they generally raise a lot of corn.  The drought decimated it early on.  In fact, I'm a 100 miles west of them and my corn is making 30 to 50 bu./ac because we got a crucial rain during tasseling.  Not a great crop either, but it is what it is.  Generally, they would have no problem sourcing corn from Missouri, eastern Oklahoma and Arkansas, but these have no corn to sell at any price.  A friend from St. Louis visited my farm three weeks ago and said the best corn between here and St. Louis was in our county.  That is as bad as it gets.

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sw363535
Posts: 4,229
Registered: ‎07-18-2011
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Re: Ethanol company suspends operations

From this plant south ---into oklahoma ---this is the second year of failure.  Southern ks was nearly a 0 last year---

 

Problem is smokey,  I haven't seen anything yet that says the pattern has changed.  I was thinking the sw should have improved as the system moved into the corn belt.  -------------Out here, we just had a repeat.  We were a little more prepared for it.  Skimpy winter moisture was timely, but------------we are still operating on 1/3 of normal moisture and above normal heat.-----dragging production down steadily.

sw
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Slim123
Posts: 191
Registered: ‎01-20-2012
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Re: Ethanol company suspends operations

Docharing: Like the old field of dreams movie saying ' build it and they will come"

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ag678
Posts: 78
Registered: ‎05-13-2010
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Re: Ethanol company suspends operations

Looks like this year we could easy see a difference of $1 or more between bids in different parts of the country.  If margins are slim this means that the inefficient plants and plants that don't have an local supply of corn available will probably quit and the plants that aren't in this position will benefit.  Looks to me like this is how you will efficiently ration this years corn supply. 

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smokeyjay
Posts: 954
Registered: ‎05-11-2010
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Re: Ethanol company suspends operations

Ag, according to my info, the plant is still in financial shape. They made this decision to suspend production on factors that made economic sense for their shareholders. They have great fiscal discipline.
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Pupdaddy
Posts: 618
Registered: ‎05-14-2010
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Re: Ethanol company suspends operations

Is that one of those plants that they make ethanol out of milo too? I've read some of the corn ethanol plants in that area can add a little bit different bacteria to their mash...and put milo in the same bin as corn. I sure would love to see how they do it..and if I could get the local ethanol plant to do the same for us here. I think we could plant wide row wheat and then interplant milo in the same field in the same year. Harvest 75 bushel wheat and 120 bushel milo in the same year?...Sounds like it's possible to me.

 

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smokeyjay
Posts: 954
Registered: ‎05-11-2010
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Re: Ethanol company suspends operations

I agree. How we emerge from this drought next spring is crucial. One weather expert recently suggested we may have a dry year in 2013 but not as severe as these past two years. Not a whole lot of comfort, however.