Valero Restarts Output at Nebraska, Indiana Ethanol Plants

Valero Energy Corp. (VLO), the third- largest U.S. ethanol producer, restarted distilleries in Albion, Nebraska, and Linden, Indiana, as margins for the fuel improved.

The company is now operating all 10 of its plants, with the capacity to produce 1.2 billion gallons of the fuel annually. Valero halted the operations in Nebraska and Indiana in June, citing unprofitable returns.

“Ethanol margins improved to the point where it became feasible to operate the plants again,” Bill Day, a company spokesman in San Antonio, said in an e-mail. “We had said when we closed the plants down temporarily in June that we expected them to be back in operation during the harvest.”

Corn is the main ingredient in the alternative fuel in the U.S., with one bushel distilling into at least 2.75 gallons of ethanol. Prices for the grain for December delivery dropped 1.1 percent to $7.48 a bushel at 11:40 a.m. on the Chicago Board of Trade, down from a record $8.387 on Aug. 21.

Denatured ethanol for October delivery was unchanged at $2.28 a gallon on the CBOT. Futures have gained 3.5 percent this year.

The Agriculture Department said Sept. 17 that 26 percent of the corn harvest was completed as of the day before, up from 15 percent a week earlier.

Poet LLC in Sioux Falls, South Dakota, is the largest U.S. ethanol producer, followed by Archer Daniels Midland Co. (ADM) in Decatur, Illinois.

To contact the reporter on this story: Mario Parker in Chicago at mparker22@bloomberg.net

To contact the editor responsible for this story: Dan Stets at dstets@bloomberg.net

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