Call for Corn Bids

Graettinger, IA

Lee Carpenter

(712) 859-3663 Ext. 202

Lake Mills, WI

Pete Wollin

(920)648-2377 Ext. 18

    

 

 

Sunday, September 23, 2018  
 
Weather |  Futures |  Futures Markets |  Market News |  Headline News |  DTN Ag Headlines |  Charts |  Portfolio |  Options |  Corn News |  Soybeans News 
Home
About Us
Login/Register
Delayed Futures
Discount Schedule
Local Grainbids
Newsletters
USDA Reports
Calendar
LDP
Daily Commentary
Feedback
Admin Login
Cash Bids
 
- DTN Headline News
Green Plains Not Closing Plants
Wednesday, September 19, 2018 8:35AM CDT
By Todd Neeley
DTN Staff Reporter

OMAHA (DTN) -- Omaha-based Green Plains Inc. announced plans earlier this year to sell four to six ethanol plants as part of a plan to make the business more profitable.

In response to a report by Reuters on Monday that the company had shut down plants, Green Plains CEO Todd Becker told DTN on Tuesday his company hasn't shut down a single plant to this point.

"We have not shut down any ethanol plants," Becker said. "We have been flexing our production up and down. We have been doing this for years. The whole story that this is some bigger, broader thing is not true. This is the normal course of business. Any plant can be brought up in a day. We are operating in the exact same manner. It really is business as usual based on what we see in the market every day."

GP announced to the market earlier this year that "certain ethanol plants would be sold," Becker said.

"And, in that process, our single goal is to pay off debt," he told DTN. "We are on track to deliver on that program. We haven't announced which plants."

GP has temporarily idled an ethanol plant in Superior, Iowa, and has seen overall production cutbacks for most of the year. Like most ethanol producers in the United States, Green Plains has had to cut back production because of tight margins this year. During the first two quarters of 2018, GPRE reported it was running at 76% and 80% of production capacity because of tight margins.

Becker said the industry needs President Donald Trump to defend its interests.

"The (small-refinery) waivers are not helping it," Becker said. "That is a potential driver in lower demand."

Small refineries who received waivers, he said, then generate renewable identification numbers, or RINs, and sell those at a profit. In addition, Becker said the industry needs the administration to allow year-round E15 sales.

"It will be a fuel that outsells everything," Becker said.

Reuters reported on Monday, however, that the company was closing some plants in Iowa in advance of selling at least some of the company's ethanol assets.

GP spokesperson Jim Stark said other company Iowa plants in Lakota and Shenandoah are still running.

"We do not openly discuss our run rates at any given plant or which plants may not be running," Stark said. "We are also weeks away from our fall maintenance shutdown where a majority -- if not all -- of our plants go down for two to four days depending on the work we plan to do at that location. This happens twice a year."

Back in May, the company announced it was considering selling assets as part of a "portfolio optimization plan." As part of that plan, the company has been expanding its cattle business and is investing in vinegar production.

In a May 2, 2018, quarterly report to the U.S. Securities Exchange Commission, the company said: "As part of our long-term strategy for improving our profitability and return on invested capital, we continue to evaluate the performance of our entire portfolio of assets and businesses. Based on this evaluation, we may sell certain assets or businesses or exit particular markets that are no longer a strategic fit or no longer meet our growth or profitability targets."

In an Aug. 30 filing with the SEC, http://investor.gpreinc.com/…, GP said, "Based on current market conditions, the company is reassessing our production levels previously announced in our second-quarter earnings call on Aug. 1, 2018."

Becker said the company filed the Aug. 30 SEC statement to modify what it said in an Aug. 1 earnings call, which at the time included comments that Green Plains didn't plan to cut production further.

Green Plains operates 17 ethanol plants across the country, with a production capacity of about 1.5 billion gallons. Currently, the company is one of the top five ethanol producers in the United States.

Pavel Molchanov, senior vice president and equity research analyst at Raymond James and Associates, said overall over-production in the industry has been a profitability challenge.

"The crush spread has been weak for much of the past 12 months," Molchanov said. "In this context, Green Plains has already had some temporary, price-related plant shutdowns -- so yesterday's news is simply the latest instance of that."

The Renewable Fuel Standard sets a floor for domestic ethanol consumption, Molchanov said, "but the industry is producing well in excess of that. Most of the surplus goes for export, but because of the various trade conflicts -- especially, but not solely, with China -- export volumes have faced pressure. That's the central issue here."

Todd Neeley can be reached at todd.neeley@dtn.com

Follow him on Twitter @toddneeleyDTN

(CC/AG)


blog iconDTN Blogs & Forums
DTN Market Matters Blog
Editorial Staff
Friday, September 21, 2018 9:31AM CDT
Monday, September 17, 2018 10:58AM CDT
Friday, September 14, 2018 1:57PM CDT
Technically Speaking
Editorial Staff
Monday, September 17, 2018 10:24AM CDT
Monday, September 17, 2018 10:23AM CDT
Monday, September 10, 2018 8:48AM CDT
Fundamentally Speaking
Joel Karlin
DTN Contributing Analyst
Wednesday, September 19, 2018 6:57PM CDT
Tuesday, September 18, 2018 12:24PM CDT
Monday, September 17, 2018 12:37PM CDT
DTN Ag Policy Blog
Chris Clayton
DTN Ag Policy Editor
Thursday, September 20, 2018 8:13AM CDT
Tuesday, September 18, 2018 1:52PM CDT
Monday, September 17, 2018 3:21PM CDT
Minding Ag's Business
Katie Behlinger
Farm Business Editor
Monday, September 10, 2018 4:40PM CDT
Monday, July 23, 2018 4:05PM CDT
Friday, July 6, 2018 2:37PM CDT
DTN Ag Weather Forum
Bryce Anderson
DTN Ag Meteorologist and DTN Analyst
Thursday, September 20, 2018 12:24PM CDT
Tuesday, September 18, 2018 3:37PM CDT
Friday, September 14, 2018 2:54PM CDT
DTN Production Blog
Pam Smith
Crops Technology Editor
Friday, August 31, 2018 10:30AM CDT
Thursday, August 9, 2018 7:47PM CDT
Friday, July 27, 2018 11:38AM CDT
Harrington's Sort & Cull
John Harrington
DTN Livestock Analyst
Monday, September 17, 2018 11:55AM CDT
Thursday, August 30, 2018 4:06PM CDT
Friday, August 3, 2018 5:33PM CDT
An Urban’s Rural View
Urban Lehner
Editor Emeritus
Thursday, September 13, 2018 5:39PM CDT
Tuesday, September 4, 2018 11:26AM CDT
Monday, August 20, 2018 3:04PM CDT
Machinery Chatter
Dan Miller
Progressive Farmer Senior Editor
Friday, September 7, 2018 12:40PM CDT
Thursday, August 30, 2018 12:13PM CDT
Wednesday, August 22, 2018 2:18PM CDT
Canadian Markets
Cliff Jamieson
Canadian Grains Analyst
Friday, September 21, 2018 3:52PM CDT
Thursday, September 20, 2018 3:11PM CDT
Wednesday, September 19, 2018 2:16PM CDT
Editor’s Notebook
Greg D. Horstmeier
DTN Editor-in-Chief
Friday, August 24, 2018 5:53PM CDT
Friday, August 17, 2018 5:12PM CDT
Thursday, August 16, 2018 7:00AM CDT
 
Copyright DTN. All rights reserved. Disclaimer.
Powered By DTN