Cardinal: Corn oil production was below expectations

Corn Oil

Management anticipates continuing to increase our corn oil production during our 2011 fiscal year as we continue to refine the operation of our corn oil extraction equipment. We entered into an ICM Equipment Testing Agreement with ICM, Inc., the manufacturer of our corn oil equipment, for advanced oil recovery in October 2010. Pursuant to this Agreement, ICM will test new equipment to attempt to recover more corn oil from the plant.

Our corn oil sales increased in the three month period ended March 31, 2011 as compared to the same period in 2010 as a result of increased production in the three month period ended March 31, 2011. Our corn oil production was below expectations for the quarter ended March 31, 2011, mainly due to our work with ICM on installing and testing the advanced oil recovery system referred to above. In March and April 2011, we began testing an additive that shows promise in significantly improving oil production. During the third fiscal period we intend to evaluate which technology, the advanced oil recovery system or the additive, will be most effective and economical in achieving desired production. Corn oil prices increased for the quarter ended March 31, 2011. Management attributes this increase to the increase in biodiesel production as a result of the extended tax credit as well as the increase in the demand for fat in some livestock rations.

See Here page 23

SkunK

PS.  The underlines in the above quote are mine and used to point out what I think are noteworthy.  You may not think so and that's OK.  Is the additive the same Ashland additive I featured in the last two blogs?  Man, that's too much of a coincidence . .  . Look at "Other Costs in the chart on page 22 - I am amaized that a ("typical", I assume?) ethanol plant spends three times more money on chemicals and additives than they do on labor costs/gallon of ethanol produced.