Three new VeraSun ethanol plants to stay off line

One of the nation's top two ethanol producers, South-Dakota-based VeraSun Energy, announced Wednesday it will delay startup of its new 110 million-gallon-per year ethanol plant in Hankinson, N.D., Perter Shinn reports for Brownfield. The Hankinson biorefinery, which joins a pair of 110-million-gallon-a-year operations in Welcome, Minn. and Hartley, Iowa, becomes the third facility VeraSun to delay startup operations this month.

VeraSun spokesperson Mike Lochrem tells Brownfield that 'market conditions' and the 'steep discount' at which ethanol sells compared to gasoline resulted in the decision to keep the plants inactive but are not the only reasons. "Corn prices are another part of that dynamic and certainly we've seen rising corn prices," Lockrem said. "But I think the real driver for us is where ethanol is selling on the marketplace." Shinn writes, "According to Lockrem, ethanol remains undervalued compared to gasoline because of the widespread market perception of ethanol over-production. He added the decision to keep 330 million gallons worth of ethanol production a year off-line should help change that perception." All three operations will be capable of producing ethanol very quickly, Lochrem said. "We're going to market on a day-to-day basis," he explained. "And when those conditions become more favorable we're going to make decisions to get these plants into production as soon as possible." For the VeraSun press release click here.