New central South Dakota ethanol plant reaches full speed

Source: By Stephen Lee, Pierre Capital Journal • Posted: Wednesday, June 19, 2019

ONIDA, S.D. — About four years after dirt first was moved on the site just south of Onida, Ringneck Energy’s ethanol plant finally is in full production, turning 80,000 bushels of corn every day into 225,000 gallons of ethanol.

The initial preliminary dirt work on the site began in 2015, as Ringneck officials began meeting with Sully County residents and officials to seek approval for the plant. Opposition from a few nearby residents and obtaining local, state and federal approvals for many steps along the way took longer than earlier hoped, Walt Wendland, president and CEO of Ringneck Energy, has acknowledged.

The first deliveries of corn came in February as construction by Fagen Inc. was winding down. A massive mid-March blizzard and a similar one in mid-April pushed back planned progress again.

“We started production the 23rd of April,” he said. But it wasn’t 100 percent at first.

“We had some ups and downs with the new process. It was kind of a mess around here that first month.”

Ear plugs might have been in short supply in Onida.

Tuning up the new boilers meant blowing off steam in a big way that made normal conversation in Onida homes not possible for a few days, according to a report in the Onida Watchman weekly.

“We were trying to work out some bugs,” Wendland said.

The boilers are mostly in tune now and there shouldn’t be much of a problem anymore with the noise, he said. “And if it does, we are building a muffler so it won’t be so noisy.”

For the past couple of weeks, production has gotten in the groove.

“It’s going 24/7 now,” he said. “We passed the performance test on June 4” that was set to check the construction and make sure everything goes according to plan, Wendland said.

That means the Fagen construction company has pretty much vacated the plant site with its crews and equipment, he said.

“We’re not at full employment yet, we are short a couple of grain and car handlers,” he said. Full employment is 42.

Finding enough workers has taken longer than expected, too, largely because of the low unemployment rate across the region, Wendland said.

Ringneck still is advertising for those two jobs.

Meanwhile, corn prices paid by the plant have gone above $4 a bushel.

“It’s been a long time since we have been over $4,” said Wendland who has been involved in building and operating other ethanol plants in Iowa and Minnesota.

While higher corn prices would appear to cut the profit possibilities of an ethanol plant, Wendland said the industry works on margins. “Ethanol prices have tended to follow corn prices to some degree because they know if ethanol doesn’t flow, production is going to drop and corn supplies will increase.”

About 14 years ago, the United States became the world’s biggest producer of ethanol and the nation’s production has kept growing: from 1.6 billion gallons in 2000 to 3.9 billion in 2005 to 13.2 billion in 2010 and about 16 billion last year.

About 10 percent of the nation’s ethanol production goes to the export market of about 20 countries, Wendland said.

Ringneck Energy is part of a marketing cooperative of 21 ethanol plants in the MIdwest, — Renewable Products Marketing Group based in the Twin Cities — that is the largest such marketing cooperative in the country, he said.

“We are hoping for the China market to open up,” he said. “That is what the industry is waiting for.”