Poet LLC reduces hours receiving corn at Indiana, Ohio ethanol plants

Source: By Michael Hirtzer, Reuters • Posted: Wednesday, February 10, 2016

Feb 9 Ethanol producer Poet LLC was cutting the hours that it receives corn this month at six of its facilities in Indiana and Ohio, with at least one plant scheduled to shut down for two days, the company’s websites showed on Tuesday.

The plants, which have a combined production capacity of more than 400 million gallons of ethanol annually, were closed for one or two days this week, the websites stated. On the days they were open, some of the plants cut the hours for receiving grain by three hours to 7:30 a.m. to 12 p.m. instead of 7.30 a.m. to 3 p.m.

The plant in Alexandria, Indiana, will not be receiving corn on Feb. 16 or 17 due to a shutdown, and the facility will also be closed for receiving corn two other days this week. Dry mill corn plants at Cloverdale and Portland facilities in Indiana, and a plant in Marion, Ohio will be closed for two days this week. Ohio plants in Fostoria and Leipsic will be closed for one day.

Poet is the No. 2 U.S. ethanol producer after top maker Archer Daniels Midland Co, according to industry data. ADM last week said it was considering options, including a sale of its dry mill ethanol plants, due to poor profitability.

A spokeswoman for privately held Poet declined to comment on “run rates or market strategies.” The company last month said it was expanding operations at ethanol plants in Iowa, Michigan and South Dakota.

Ethanol futures of about $1.40 per gallon were trading at a nearly 50-cent premium to gasoline prices – the largest such premium since 2009. That made ethanol less attractive to fuel blenders, reducing demand.

Ethanol makers in eastern U.S. Midwest states such as Ohio and Indiana have higher costs this year for corn, compared to counterparts in states such as Iowa and South Dakota, where the main input in biofuel production is cheaper and more plentiful.

Poet in Portland, Indiana, was bidding $3.89 per bushel for corn delivered in February while the company in Chancellor, South Dakota, was bidding $3.61 per bushel.

“I hope more producers are slowing down,” one cash ethanol trader said. “I have ethanol coming out of my ears.”