ADM Ethanol Markets Lawsuit Dismissed

Source: By Todd Neeley, DTN Staff Reporterʥ Posted: Thursday, July 14, 2022

Federal Judge Dismisses Ethanol Lawsuit Against Archer Daniels Midland

A federal court this week dismissed one of three ethanol markets lawsuits filed against Archer Daniels Midland. (DTN file photo)
A federal court this week dismissed one of three ethanol markets lawsuits filed against Archer Daniels Midland. (DTN file photo)

LINCOLN, Neb. (DTN) — A federal court in Illinois dismissed one of three ethanol market lawsuits against Archer Daniels Midland this week, outlining in an order that six ethanol companies in Iowa and Wisconsin were unable to prove antitrust injury.

In November 2020, Wisconsin producers United Wisconsin Grain Producers, Didion Ethanol, Ace Ethanol, Fox River Valley Ethanol, Badger State Ethanol and Iowa producer Pine Lake Corn filed a lawsuit in the U.S. District Court for the Central District of Illinois in Urbana.

The lawsuit alleged ADM intentionally manipulated and artificially depressed the price of ethanol in the United States by targeting ethanol sales activity at the Argo terminal in Illinois. The Argo terminal is the daily location for ethanol trading. The 30-minute trading window at the terminal is considered crucial because it is used to set the daily Chicago benchmark price to determine the value of Chicago ethanol derivatives.

That benchmark price is used to price and settle ethanol derivatives on the New York Mercantile Exchange and the Chicago Board of Trade.

In dismissing the case this week, the court said the ethanol companies could not prove any of their ethanol was sold at the Argo terminal or that ADM’s actions drove other ethanol producers out of business.

The lawsuit said from 2017 to 2019, ADM controlled 70% of the Argo terminal market and accounted for 90% of ethanol sold during the critical market window.

 

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