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SW MN and Gold Canyon AZ | I don't think the E-plants are paying for to much spot month prices. According to people I talk to alot of contracted corn went into plants lately @3.50. Plants were pretty aggresive in buying corn last year. The poet plant I haul to used minimum price contracts, so you know they were hedged. I've got a few contracts I'm still long the march contract from $3.70. They would have to be long also to pay me when I decide to liquidate those contracts.
Also as price of corn rises DDG's follow. So its not like everything stands still. Plants that don't have any debt are still doing very well.
Its not the price as much as the crush margins just like soybean plants.
If corn goes to 6$ and the price of crude and gasoline drop ,then I would say they will be in trouble. Alot of it will be in how good they are in hedging off the risk. A good manager would be worth his weight in gold if he knows what hes doing. | |
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Learned a couple things about the local ethanol plant today.
