Governors' Biofuels Coalition

Two of Archer Daniels Midland Co.’s mills will be reviewed for “strategic options,” which could lead to a sale, according to ADM officials.

Ten years ago, the company announced the construction of the mills, securing its title as the United States’ top ethanol producer.

“Ethanol and other biofuels are an increasingly important part of the world’s energy supply, especially as the world’s energy needs continue to grow,” Edward Harjehausen, ADM senior vice president of corn milling and bioproducts, said in 2006.

That year, crude oil prices reached $60 a barrel, record amounts of gasoline were being consumed, and the U.S. government was requiring biofuel use. ADM spent $1.3 billion on new mills to boost its ethanol production capacity to 1.7 billion gallons per year.

Less than six years after ADM opened a mill in Nebraska and another in Iowa, however, the company is having to rethink and revise its strategy.

Declining oil prices and a shifting political landscape have left the biofuel industry reeling.

“Going back the last three decades, ADM has probably been the biggest proponent of ethanol along with being the biggest producer,” said David Nelson, a consultant who covered ADM as an equities analyst. “The fact that they might be scaling back suggests the reality for this industry has change.”

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