HASTINGS (AP) — Almost one-third of Nebraska's 24 ethanol plants have been shut down because high corn prices make it unprofitable to keep running them.
The Ag Processing Inc. cooperative said Friday that it had shut down its 55-million-gallon-a-year plant in Hastings. The Grand Island Independent reports (http://bit.ly/YN3E22 ) that is the seventh ethanol plant in the state to close.
Nebraska Ethanol Board administrator Todd Sneller said a number of ethanol plants nationwide have been idled because of high corn prices and dwindling profit margins.
But he said many of the plants that remain open are maxing out production to help meet demand. Sneller said ethanol plants can better withstand high corn prices if there is strong demand for their distiller's grain as feed in the area.
Producing ethanol is a challenging business right now because corn is in high demand and most of the corn-producing region of the United States is dealing with drought.
The USDA's National Agricultural Statistics Service says Nebraska's corn harvest declined 16 percent last year to 1.292 billion bushels. That contributed to an average price of $7.45 per bushel in Nebraska last month, up from $6.28 per bushel a year earlier.
AGP CEO Keith Spackler said the decision to shut down the Hastings plant was difficult because of the employees affected, but the plant couldn't continue operating while losing money.
But AGP remains committed to ethanol production and plans to reopen the plant at some point.
"Despite industry challenges, AGP still believes renewable fuels — corn ethanol and soy biodiesel — are vital to corn and soybean producers, rural economic development and to the nation as a clean, home-grown source of energy," said Cal Meyer, AGP group vice president.
The AGP plant in Hastings opened in 1995 and used 20 million bushels of corn annually. AGP is owned by co-ops representing more than 250,000 farmers in 15 states.