Green Plains to shut down two Iowa plants

Green Plains Inc, a major US ethanol producer, is to shut down two ethanol plants in Iowa and cut output at another in Minnesota due to low profit margins, three industry sources told Reuters.

The production cuts come after the Trump administration escalated trade disputes and cut off US access to ethanol markets in China, contributing to a domestic supply glut that has pushed biofuel prices to near their lowest in over a decade.

Ethanol futures prices traded on the Chicago Board of Trade in late August fell to $1.21 per gallon, the lowest price in over a decade.

Ethanol in Chicago cash markets, meanwhile, were about $1.28 per gallon, just above a low of $1.24 from December, traders told Reuters.

Green Plains idled until further notice at its facility in Superior, Iowa, but will soon shut down its plant in Lakota, Iowa, while the company’s plant in Fairmont, Minnesota, was running at half capacity, said the sources, who asked not to be named.

Green Plains in an August 30 regulatory filing said, “Based on current market conditions, the company is re-assessing our production levels.”

Together, the plants represent about 20 percent of Green Plains’ annual ethanol production capacity of roughly 1.48 billion gallons.

Green Plains is about tied with Valero Energy Corp as the third largest ethanol maker in the US, behind POET LLC and Archer Daniels Midland Co.