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Ethanol Plant Closures Concern Producers

August 14, 2012, 10:13 PM by Brady Mallory

Ethanol Plant Closures Concern Producers
PARKER, SD -

The drought has dried up fields, and now it is shutting down ethanol factories.  Due to the low supply and high prices of corn, officials with The Central Minnesota Ethanol Co-op in Little Falls, Minnesota, are temporarily shutting down ethanol operations.  East Kansas Agri-Energy in Garnett, Kansas, is also quitting production.  Decreasing the ethanol supply could also take a toll on feed supplies. 

The pigs and cattle at the Turner County Fair were taking it easy.  However, there has not been much relaxing for the ones who feed them.

"They have to eat something," Randy Wirt of Wirt Farms said.

Since this year's corn crop leaves a lot to be desired, an alternative type of feed known as distillers' dried grains with solubles is usually the go-to for pigs and cattle.  DDGS is a co-product of ethanol and is usually a cheaper feed source.

"It's another source of protein and high in phosphorus so we can save on phosphorus in our feed," Wirt said.

The ethanol plant closures do not mean there is a shortage of DDGS yet.  However, shutting them down even temporarily raises concerns for the future.

"It means we still have to find another additive (if there is a shortage) to put in the ration or we have to buy more of the higher-priced corn that we can find," Paula Loewe of The Opportunities Farm said.

Beyond ethanol plant shutdowns, producers are taking another hit when it comes to DDGS.  Typically DDGS is about 75 or 85 percent of corn.  This year, it is about the same price as corn, which is inching toward $8 a bushel.

"All of us producers are going to have to look at our inventory.  With our feed costs, we can't afford to raise them for nothing," Wirt said.

Both Wirt and Loewe will tell you farming and raising livestock is not for the faint hearted.

"It's not in our hands.  You wish and pray for rain and you do the best you can with what you have, I guess," Loewe said.

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