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Husker Ag Asks Farmers To Accept Notes
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| The Husker Ag ethanol plant in Plainview, Neb., as seen during brighter days in this 2006 photo. A “temporary shutdown” of the plant was authorized this past week, with officials saying Monday that production could begin again by the end of the month, but it will not be accepting corn deliveries “until further notice.” (P&D File Photo) |
By Lisa Hare
lisa.hare@yankton.net
PLAINVEW, Neb. — The board of directors for the Husker Ag ethanol plant, located in Plainview, Neb., have announced the authorization of a “temporary shutdown” of the plant.
Though spokespersons from Husker Ag declined to comment, the company said in a press release issued Monday that it anticipates resuming operations before the end of the month, though it will not be accepting any corn deliveries “until further notice.”
During a meeting held Monday, in Osmond, Neb., between corn suppliers and Husker Ag, terms were offered to producers holding contracts with the company.
“There were about 150 unhappy farmers there,” said one producer who wished to remain anonymous. He added that no resolutions were reached during the meeting.
“(Husker Ag) had its attorney present, so they weren’t answering anyone’s questions,” another producer said.
“It’ll take a long time to get everyone to agree on anything,” he said. “I doubt they’ll be running before Feb. 15.”
The farmer said the terms that were offered by Husker Ag were that producers would accept current market prices for bushels sold under contract, taking a five-year promissory note for the difference of the contracted price.
“They’re not letting anyone out of any of those contracts, but they won’t honor their end,” he said. “That corn is tied up.”
Husker Ag of Plainview is an ethanol production facility built by Fagen, Inc., of Granite Falls, Minn. In the fall of 2007, the plant expanded its operation to utilize more than 25 million bushels of corn per year to produce about 75 million gallons of denatured ethanol. The facility also produces about 450,000 tons of modified wet distillers’ grain per year, which is fed by area cattle feeders, and employs 47 full time employees.
As a commodity-based business, the company cited “record volatility in all markets” as the main reason for its current cash-flow problem.
In a letter sent to all 2009 contract-holders for corn purchase, Board Chairman Mike Kinney said, “For a variety of reasons largely unrelated to agriculture, large financial institutions started to show strain, which ultimately led to failures of Lehman Brothers and others causing wide spread panic and a mass sell-off of commodities by hedge funds and others.”
The company’s press release stated that Husker Ag has realized sharp declines in margins over the past few months, though the company is “working hard to weather these volatile market conditions.”
“The sad thing is, this was all caused by outside investors who have probably never set foot in a cornfield,” said another producer who wished to have his name withheld. “These are the same (explicative) who are getting bailed out. Now it’s the farmers left holding the bill.”
Though spokespersons from Husker Ag declined to comment, the company said in a press release issued Monday that it anticipates resuming operations before the end of the month, though it will not be accepting any corn deliveries “until further notice.”
During a meeting held Monday, in Osmond, Neb., between corn suppliers and Husker Ag, terms were offered to producers holding contracts with the company.
“There were about 150 unhappy farmers there,” said one producer who wished to remain anonymous. He added that no resolutions were reached during the meeting.
“(Husker Ag) had its attorney present, so they weren’t answering anyone’s questions,” another producer said.
“It’ll take a long time to get everyone to agree on anything,” he said. “I doubt they’ll be running before Feb. 15.”
The farmer said the terms that were offered by Husker Ag were that producers would accept current market prices for bushels sold under contract, taking a five-year promissory note for the difference of the contracted price.
“They’re not letting anyone out of any of those contracts, but they won’t honor their end,” he said. “That corn is tied up.”
Husker Ag of Plainview is an ethanol production facility built by Fagen, Inc., of Granite Falls, Minn. In the fall of 2007, the plant expanded its operation to utilize more than 25 million bushels of corn per year to produce about 75 million gallons of denatured ethanol. The facility also produces about 450,000 tons of modified wet distillers’ grain per year, which is fed by area cattle feeders, and employs 47 full time employees.
As a commodity-based business, the company cited “record volatility in all markets” as the main reason for its current cash-flow problem.
In a letter sent to all 2009 contract-holders for corn purchase, Board Chairman Mike Kinney said, “For a variety of reasons largely unrelated to agriculture, large financial institutions started to show strain, which ultimately led to failures of Lehman Brothers and others causing wide spread panic and a mass sell-off of commodities by hedge funds and others.”
The company’s press release stated that Husker Ag has realized sharp declines in margins over the past few months, though the company is “working hard to weather these volatile market conditions.”
“The sad thing is, this was all caused by outside investors who have probably never set foot in a cornfield,” said another producer who wished to have his name withheld. “These are the same (explicative) who are getting bailed out. Now it’s the farmers left holding the bill.”
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| On This Date (01/07/09) |
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