Closed ethanol plant to reopen

Posted at 3:15 PM on September 15, 2010 by Mark Steil (5 Comments)

An ethanol plant shutdown for most of the past two years is getting ready to reopen. The DENCO plant in Morris in west central Minnesota fell victim to a sharp downturn in the ethanol industry in 2007-2008. The plant's Australian owner, the now-defunct Babcock and Brown Environmental Interests, closed it in January 2009.

A new group of owners, mostly farmers from the Morris area, finalized their purchase of the plant in late August. General Manager Mick Miller says "things have happened really quick".

Miller says since the sale was closed "we've started from scratch". He says he's hiring the 30 employees the plant needs to operate.

Those workers are getting the facility ready to start making ethanol again. Miller hopes the plant, to be called DENCO II, will be operational by the end of the month. He says it will produce 25 million gallons of ethanol a year from about nine million bushels of corn.

The downturn which forced the shutdown of the original DENCO operation was triggered by high corn prices. The high prices raised the cost of making ethanol and triggered a wave of U.S. ethanol plant shutdowns and bankruptcies -- among them VeraSun, Otter Tail, Greater Ohio Ethanol and Gateway Ethanol. At the worst point about 20 percent of the U.S. ethanol industry was idled. Ironically the high corn prices, over seven dollars a bushel, were largely caused by the ethanol industry's increasing use of the grain.

Over the past year or so profit margins have improved for the industry and many of the shutdown plants, like the Morris operation, have resumed production.

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Comments (5)

This is good news for Morris. Even with some plants closing, Minnesota has been able to produce enough ethanol for its demand (in the form of E10 gasoline and E85) and still have plenty left to sell to other states.

Posted by Bob Moffitt | September 16, 2010 7:32 AM

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I take issue with your largely incorrect statement: "Ironically the high corn prices, over seven dollars a bushel, were largely caused by the ethanol industry's increasing use of the grain."

Almost everyone now admits that ethanol was and is only a minor part of the corn price inflation. The proof is that 2008 high prices did not continue to go up in spite of dramatically increased ethanol output.

It is truly ironic that reporters continue to bend the facts to give their articles zip. Stick to the facts.

Posted by pyotr petrovich | September 16, 2010 10:41 AM

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Great news for the Morris area and Minnesota economy!

Mr. Steil: The spike in corn prices (and all other commodities in 2008) to which you refer was not caused by corn ethanol production. An off-the-cuff statement like that is terribly inflamatory and it perpetuates misperceptions. Please correct your article. Thank you.

Posted by Tim Gerlach | September 16, 2010 12:32 PM

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Mr. Steil: I urge you to please correct the statement refferred to in the previous two comments. That statement is out of line with the truth and needs to be corrected.
When corn hit $7, all the media wanted to talk about was "Ethanol is causing all of our food price hikes." Since corn has dropped in price, has your grocery bill decreased?

Posted by Andy Dupraz | September 17, 2010 8:50 AM

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