Feb. 1 (Bloomberg) -- Ag Processing Inc., a grains processor, said it shut operations at its ethanol plant in Hastings, Nebraska, because of high corn prices.
The plant was idled today, and the company will evaluate market conditions to determine when it will restart, Omaha, Nebraska-based Ag Processing said in a statement on its website.
Before Ag Processing’s announcement, 18 ethanol plants had been idled since June as drought in the Midwest scorched and shrank corn crops and raised costs to make the grain into ethanol, according to data from the Renewable Fuels Association, a Washington-based trade group.
“Our facility, like other corn processing plans in the Midwest, continues to experience negative margins due to higher corn prices driven by ongoing drought conditions and lower ethanol prices,” Ag Processing Chief Executive Officer and General Manager Keith Spackler said in the statement.
Denatured ethanol for February delivery has risen 14 percent in the past year to $2.469 a gallon on the Chicago Board of Trade. That compares to a 15 percent jump in corn to $7.36 a bushel.
The corn crush spread, or the profit that can be made from turning a bushel of corn into ethanol, is minus 20 cents a gallon, down from minus 22 cents yesterday, assuming one bushel makes at least 2.75 gallons of the biofuel, data compiled by Bloomberg show.
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