Future of Ethanol Plants

[89rabbit]

http://www.argusleader.com/apps/pbcs...NEWS/705200309

Ethanol industry trend: Will big companies take over?
Farmers would give up control but profit from outside investment

By Peter Harriman
pharrima@argusleader.com
Published: May 20, 2007

Large profits and rapid expansion in the ethanol industry have boosted farmers' incomes across South Dakota in recent years.

But those same factors threaten to change the economic model of small, farmer-owned ethanol plants that got the industry started. Large-scale producers are the future, many say. And in at least one neighboring state - Iowa - they have already taken control of the industry with out-of-state firms holding an ever-larger share of ethanol plant ownership.

South Dakota has seen ethanol production change from plants producing about 10 million gallons in the early 1990s to plants today that produce 100 million gallons or more.

That trend probably will continue.

"It's actually an economic reality," said John Sondey, South Dakota State University economist. "As an industry proceeds, the size of the average firm grows. The smaller firms consolidate or leave the industry."

Some experts say if consolidation is the future, the current farmer-owners of South Dakota's ethanol plants should be well placed to profit from it. While the farmers won't be running the smaller plants anymore, they will be contributing, Sondey said. "They may hold stock in a bigger company if they are paid off in stock. They will certainly have a ready market for their corn," he said.  .  .  .  (read more)


Go State!  

[joeboo22]

Re: Future of Ethanol Plants

I work for POET which was formally called Broin's and a vast assortment of other names. The thing with ethanol plants is local support. I work in Scotland a little history about the plant in Scotland is that in the 80's when the first ethanol boom was a plant in Scotland was built it was between 2-4 million gallons a year which was one of the bigger plants at that time, it went bankrupt in around 5 years and closed its doors at the bankruptcy sale 3 Broin brothers bought the plant and had planned on scraping it and taking the useful material to there small distillary at the family farm in Minnesota. After purchasing it they thought that it was capitable of being ran in scotland. Broins remodeled it and made it produce 9 million. By that time they were recieving 30-50cent a gallon govermnt aditives. Broins became multimillion buisiness men while the original investers lost money on the situation. The fact is the town of Scotland does not support the plant for that reason. As many of you may know I go to school in Spearfish just north of Spearfish in Belle Fourche Pro Eco wants to build an ethanol plant the investers are not local and the community is dead against it.

What I am getting at is this an ethanol plant is an ethanol plant... there are only a couple of ways ethanol can be made and because its not locally owned doesn't mean they are going to make it different. The employees are going to be local and the most corn they can get locally they will. The plant being locally owned allows for community support.