Ethanol plants in North Dakota are adjusting to the retraction in fuel demand. “We’ve seen ethanol prices in the cents as opposed to dollars,” explained Jeff Zueger, CEO, Midwest AgEnergy. “Ethanol futures traded as low as 70 cents and are now around 90 cents. Those numbers simply don’t work with $3 plus corn futures.” In North Dakota, ethanol plants are producing at slower rates and one ethanol plant is closed. Zeuger said in the last few days there’s been a positive contribution margin for some ethanol plants. “We’re finally better running our facilities than we were shutting down. We had negative margins so strong that you were better shutting down than running. However, we’re not out of the woods yet.” To help local ethanol plants, the North Dakota Industrial Commission approved a loan guarantee and an interest buy-down program for the North Dakota ethanol industry. “We are thankful for this action,” said Zeuger. “Working capital becomes very important as we navigate the challenging times our business is facing.” Moving forward, ethanol producers will continue to closely watch demand. Zeuger is hopeful for a quicker than expected rebound.
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