ADM dry mills in Iowa and Nebraska to remain idle this winter

Source: By Erin Voegele, Ethanol Producer Magazine • Posted: Sunday, November 1, 2020

ADM released third quarter financial results on Oct. 29, reporting improved results for its ethanol operations. The company, however, said its dry mill ethanol plants in Cedar Rapids, Iowa, and Columbus, Nebraska, will likely remain idle through the winter.

ADM announced plans to idle the two facilities in April due to the impacts of the COVID-19 pandemic. During the company’s third quarter earnings call, held Oct. 30, Ray Young, executive vice president and chief financial officer of ADM, explained that driving miles and fuel demand typically fall in the winter. “We believe we’re probably going to keep these dry mills temporarily idled as we go through the low season of gasoline demand, and hence ethanol demand,” he said. “That’s the responsible thing to do.” He said the company will continue to look at all the relevant data and restart the idle facilities when it makes sense to do so, noting the plants could begin production next spring. He stressed the decision to bring the idle plants back online will be a “data-driven decision” and added that the company sees a path “toward some sort of restart in the first half of next year.”

For the third quarter, ADM reported that segment operating profit for Carbohydrate Solutions reached $246 million, up from $182 million during the same period of last year. In North America, balanced ethanol industry supply and demand drove improved wet mill ethanol margins. In its Vantage Corn Processors segment, ADM said distribution gains on wet will ethanol and significantly improved year-over-year ethanol margins helped to offset fixed costs from its two temporarily idled dry mills. Increased volumes and margins of USP-grade industrial alcohol for hand sanitizer also supported improved performance. Vantage Corn Processors reported a $11 million loss for the quarter, up from a $15 million loss during the third quarter of 2019.

Overall, ADM reported segment operating profit of $904 million, up from $758 million. Adjusted segment operating profit was at $849 million, up from $764 million. Earnings per share were at 40 cents, down from 72 cents during the third quarter of last year. Adjusted earnings per share reached 89 cents, up from 77 cents during the same period of 2019.