Red Trail in Financial Turmoil

A North Dakota ethanol plant is facing an uncertain financial future amid the recession that culminated in a $5.4 million loss for Red Trail Energy last year, according to the company's most recent financial report filed with the Securities Exchange Commission.

Like other ethanol plants around the nation, Red Trail Energy, an ethanol plant in Richardton that opened in 2007 and produced nearly 55 million gallons of ethanol fuel last year, is facing a daunting problem: an oversupply of fuel and a weakened appetite for it - as well as gasoline - among American consumers.

"It's been ugly," said Mike Appert, the chairman of Red Trail's board of directors that met in Bismarck on Thursday to discuss the company's finances.About 20 percent of domestic ethanol production has been shut down as of March, according to the company's financial report.

Full Article Here:
http://www.bismarcktribune.com/articles/2009/05/29/news/topnews/186247.txt

SkunK Note: Todd Neely has good insight on Ethanol matters - below he describes the situation that not only Ethanol - but also the seed crushing facility in Montana faced. They purchased contracts in the high prices of the spring and summer of 2008 and as harvest time came they were faced with paying the high prices while the price of all oils and biofuels collapsed.

Todd Neeley DTN:
As we've seen with the number of ethanol bankruptcies and reported financial trouble in the past year, the volatile corn market of 2008 hurt a lot of companies. VeraSun Energy Corp. is a prime example. VeraSun had contracts with farmers to supply corn in the $4 to $6 range last year. Then when corn prices fell in some cases below $3 a bushel last fall, VeraSun was stuck with higher-priced corn. As a result the company, which was one of the three largest producers at the time, recorded losses of about $400 million in just one quarter. Those ethanol producers still in operation now are working hard to overcome the after effects of high-priced corn. In some cases, the options are limited.

http://www.dtnprogressivefarmer.com/dtnag/common/link.do?symbolicName=/ag/blogs/template1&blogHandle=ethanol&blogEntryId=8a82c0bc20eaaa3801218cc40b37080d

SkunK

PS. June is normally the rainy season in these parts and I got a taste of that over the last few days. I will use the remaining sunshine to make my exit back to the good ol' USA. May be off the radar for a bit . . .