Ethanol Plants - High Corn Prices

No doubt...shelling out more than 7 dollars for one bushel of Corn...hurts any rancher's bottom l...  More »

No doubt...shelling out more than 7 dollars for one bushel of Corn...hurts any rancher's bottom line. But producers aren't the only ones feeling the pinch. Reporter Sarah Gustin brings us the story of how increasing corn prices are also affecting the fuel industry. Livestock aren't the only ones eating up 7 dollar corn. (Mick Miller / President and CEO) We are buying corn daily. When prices are high we have a tendency to not be as aggressive in our purchasing, but we are constantly buying corn, although the corn price is very high right now ethanol has had the tendency to track the price of corn, to allow for a margin. Red Trail Energy opened it's doors January 2007. Every day about 100-thousand bushels of corn are delivered. To keep up with the 60-thousand bushels being ground daily. And 90 percent of those bushels are grown right here in North Dakota. (Sarah Gustin / KX News) If you think it costs alot to fill your bin, the silos you see behind me can hold up to 1.75 million bushels of corn. (Mick Miller / President / CEO) That is a little over 30 days worth of grind for our facility. So when times get, when prices are high if we have the ability to widen the basis and maybe not purchase as much corn when we are in these very volitole markets it allows us to maybe buy corn on maybe a more stable, stable market and try to capture the lowest price we can get for that bushel of corn. Miller says one bushel of corn produces about 2.75 gallons of ethanol. And he says that the weekly demand for ethanol has been averaging 8.5 to 8.8 billioin gallons of ethanol on an annualized basis. And now they are looking into even more ways to help offset some of their high costs. (Mick Miller / President and CEO) Facilites such as this also have been looking at alternative streams of revenue such as oil extraction, possibly capturing co2 and any efficiency gains we can do. And just like it is for cattleman...Miller says it is all about contracting and timing. (Mick Miller / President/CEO) We are lookiing at already buying corn through next year so we have enough corn contracted in today's market to give us that comfort level to keep the plant running without any worries. In Richardton, reporting for KX News, I am Sarah Gustin. Red Trail Energy is producing about 165-thousand gallons of ethanol every day.  « Less