40 Corn Ethanol Plants Could File For Bankruptcy by Early 2009
photo: Stefanie Seskin
Two weeks ago, the world's largest ethanol producer, Verasun, filed for bankruptcy. But that's just the tip of the iceberg: According to an Omaha, Nebraska investment banker (quoted in the Des Moines Register) the number of ethanol plants filing for bankruptcy could rise from 16 so far this year to as many as 40 by early 2009.Producers Can't Hedge Against Corn Price Fluctuation
Because of the current financial climate, Mark Lakers of Ag & Food Associates LLC said, most ethanol plants can't hedge their corn prices anymore and as a result and "there is consolidation coming in ethanol". Though he added that "Ethanol production will continue of even increase" because he "can't see a Democratic administration beating up on ethanol."
For one, I hope the incoming Democratic administration does beat up on ethanol (and Big Corn in general) a bit. Biofuels certainly have their place, but corn ethanol is solidly at the bottom of the pile of good feedstocks, needs to be phased out as quickly as possible and replaced with second generation feedstocks not derived from food crops.
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