(May 2006) - As planned, Commonwealth Agri-Energy
(CAE) completed their plant expansion this February to
produce 33 million gallons of ethanol per year from 24
million gallons. According to CAE general manager Mick
Henderson, this equates to 33,000 bushels, or 33 truck
loads, per day of corn.The plant decided to expand
production due to the remarkable increase in ethanol demand
and plant success.
While CAE sells most of its ethanol with
six-month fixed price contracts, the May 2006 Chicago Board
of Trade ethanol futures are priced at 2.75 per gallon.
“The MTBE phase out is the biggest impact on
the market today,” said Henderson. “Natural gas has also
been very high this winter and dramatically affected our
costs per gallon.”
Due to the higher cost per gallon, Henderson
said the local fuel retailers that were blending ethanol in
gasoline voluntarily will switch off ethanol blends unless
they can make more money on their ethanol margin than
regular unleaded.
The sale of the two co-products from ethanol
production, CO
2 and distiller’s
grains, continue to be very successful. Pain Enterprises
constructed a dry-ice plant next to CAE and Henderson says
the plant is running well and they have a good working
relationship.
Henderson also says the DDGS and wet feeds
continue to be sold out, and he has seen a shift in their
customer base, selling more recently to Southeast cattle
markets.
“The plant’s future looks very bright as the
industry is getting lots of good press,” says Henderson.
“U.S. consumers are starting to recognize its value. So is
the investing community.
There are plants being built all over the
Midwest. There are some very large plants being talked about
in our region. This may hurt our small plant’s ability to
compete in the future, but maybe this means the plant should
grow more.”
