CHICAGO, Ill. (Reuters) — Closed U.S. ethanol plants are now coming back online as a record U.S. harvest pushes down corn prices and improves biofuel profit margins.
Cargill Inc. has restarted a plant in Fort Dodge, Iowa, that it bought in 2011 from corn processor Tate & Lyle.
The announcement came as Noble Group Ltd. said it will soon restart an Indiana ethanol plant that was shut for a year, while another facility that was idled for five years in Ohio came back online last month.
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U.S. farmers are harvesting a corn crop expected to reach a record 14 billion bushels. The big harvest is replenishing stockpiles diminished by 2012’s blistering drought and pressuring benchmark Chicago Board of Trade corn futures to their lowest levels in three years.
Ethanol margins are the highest since late 2009, the last year of a record corn harvest.
Cargill, a top U.S. ethanol producer, will eventually produce 115 million gallons a year at the Fort Dodge plant.
“When full production capacity is reached, the plant will consume 150,000 bushels of corn a day and turn out five products, including dextrose, ethanol and SweetBran feed for cattle,” said plant manager Al Viaene.
Cargill also produces ethanol at plants in Blair, Nebraska, and Eddyville, Iowa.
Noble Group was revamping a plant in South Bend, Indiana, with an annual capacity of 100 million gallons. It should restart early in 2014. Liquidators bought the facility at auction in January for $2.5 million and then sold it in July to Noble Americas, a subsidiary of the Hong Kong-based Noble Group.
“They want to get going as fast as possible. They are planning for the first quarter, certainly by the end of March,” said Chris Fielding, director of business development for the City of South Bend.
