By Jarrett Renshaw and Michael Hirtzer
NEW YORK/CHICAGO (Reuters) – Major U.S. ethanol producer Green Plains Inc is shutting down two ethanol plants in Iowa and cutting output at another in Minnesota due to low profit margins, three industry sources told Reuters.
The production cuts come after the Trump administration’s escalating trade disputes cut off U.S. access to ethanol markets in China, contributing to a domestic supply glut that has pushed biofuel prices to near their lowest in over a decade.
Green Plains idled until further notice its facility in Superior, Iowa, and soon will shut down the plant in Lakota, Iowa, while the company‘s plant in Fairmont, Minnesota, was running at half of its capacity, said the sources, who asked not to be named.
Company spokesman Jim Stark did not immediately respond to requests for comment on Monday. Green Plains in an Aug. 30 regulatory filing said, “Based on current market conditions, the company is re-assessing our production levels.”
Together, the plants represent about 20 percent of Green Plains’ annual ethanol production capacity of roughly 1.48 billion gallons. Green Plains is about tied with Valero Energy Corp as the No. 3 ethanol maker in the United States, behind POET LLC and Archer Daniels Midland Co.
(Writing by Michael Hirtzer; Editing by Cynthia Osterman)