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High Corn Prices Squeezing Minnesota Ethanol Plants

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(credit: CBS) Bill Hudson
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LITTLE FALLS, Minn. (WCCO) – As the devastating drought continues to force corn prices higher, it’s also pushing one Minnesota ethanol plant to suspend production.

Central Minnesota Ethanol Co-op in Little Falls is shutting down for the time being while it’s unable to make a profit. The suspension of ethanol production will put about 30 plant workers out of work.

It’s one of those good news, bad news stories. Farmers or growers are relishing the high corn prices, but on the flip side, $7 to $8 bushel corn is squeezing the profits off the ethanol plants.

Lon Johnson runs Centra Sota Feeds, the local feed mill.

“The ones selling are pretty happy. The ones buying, they maybe don’t like it as well, but as long as everything else evens out – the products that they’re selling – as long as that all evens out, yeah, there’s profits in it,” Johnson said.

But Minnesota’s 20 ethanol plants are being squeezed by high prices.

The Little Falls plant will shut down and do maintenance. Today’s corn prices it’s no longer profitable.

Tim Rudnicki heads the Minnesota Biofuels Association.

“I think it’s no surprise. Certainly the price of corn is having an impact on the production cost for Minnesota ethanol producers,” said Rudnicki.

Rudnicki, however, maintains ethanol is here to stay despite this latest setback.

“I think once we have the harvest, we’ll know more about corn and supply and price,” added Rudnicki.

If that harvest is strong, that would put downward pressure on prices and help lower the cost of ethanol production, which would put the plant back in business.

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