Low ethanol prices and high production costs contributed to a big first-quarter loss for the owner of an ethanol plant in northwest Minnesota, which could be a bellwether for the industry.
The industry's tough times go back to the end of a federal subsidy on Dec. 31. Ethanol blenders late last year bought all the fuel they could to capture the subsidy money before it expired. That encouraged overproduction, which drove down prices.
Green Plains Renewable Energy, which owns the plant near Fergus Falls, lost nearly $13 million in the first three months of 2012, compared to making almost $8 million in the same period last year.
Green Plains CEO Todd Becker said the company cut production in the first quarter in response to market conditions.
"We produced 176 million gallons, which was about 5 percent below our plant's full capacity," Becker said.
Becker said he expects the finances of the ethanol industry to gradually improve through the rest of the year. Overseas sales continue to be one bright spot, he said.
"We are encouraged by U.S. ethanol exports, totaling 151 million gallons for the first two months of 2012, which is actually ahead of exports by 29 percent for the same period from last year's record exports," he said. "Ethanol continues to be the cheapest motor fuel in the world so this trend should continue for some time."