Corn Plus, a Minnesota cooperative, announced plans to suspend operations at its ethanol plant in Winnebago, Minn., upon completion of its current production run. The board and management of Corn Plus are and will be working with Corn Plus’s lenders, creditors and other stakeholders to determine next steps, which could include restarting operations, or a future sale or other disposition of the plant, the company said in a statement.
The news comes as the ethanol industry nationwide has started to feel the pain of different market influences. Hundreds of millions of gallons of production remain offline, with plants impacted in Iowa, Michigan, Illinois, Indiana, Kansas, Minnesota, Ohio, Florida, Virginia, Texas, Missouri, Georgia, Mississippi, Pennsylvania, Wisconsin and Nebraska.
U.S. ethanol inventories have been rising in the wake of foreign trade policies that have lowered U.S. ethanol exports, resulting in lower prices for ethanol. Additionally, the EPA’s issuance of special refinery exemption waivers has reduced the obligations outlined in the RFS for the amount of ethanol required when producing gasoline, Corn Plus said. “The resulting destruction in ethanol demand has negatively impacted corn demand from U.S. farmers, who sell their corn to ethanol plants as a feedstock for ethanol production.”
Over the last few years, Corn Plus implemented significant projects that dramatically improved plant performance and increased capacity to nearly 50 million gallons per year. Despite these upgrades, the decline in market economics for the industry has created very difficult conditions to ongoing operations of Corn Plus, resulting in the plant being unable to operate profitably in the current environment.
Most of the plant’s 37 employees were notified earlier this week that they will be laid off. However, the board of Corn Plus remains hopeful that the layoffs will not be permanent and the plant could re-open in the future if, among other things, market conditions improve.
“This has been a very difficult situation for Corm Plus to navigate,” said Lawrence Sukalski, board chairman for Corn Plus. “We kept the plant open as long as feasible, in hopes that we could continue operations and retain jobs for our employees. We just could not overcome the negative economics that the industry is facing right now.”