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ETHANOL PLANTS FOCUS ON RISK MANAGEMENT
(Aurora News Register) -- As corn prices soar near the $8 mark, owners and managers at Nebraska’s 21 ethanol plants are focusing on risk management techniques with their ultimate success hinging on the ability to anticipate the cyclical nature of the commodities business. Most of the companies already up and running in the state “are on pretty solid ground” in that respect, according to Todd Sneller, administrator of the Nebraska Ethanol Board. These days, however, there is little room for error. “While we hear a lot about $7 and $8 corn, I suspect most Nebraska plants are not operating with costs at that level,” Sneller said. “Many of the managers I’ve talked to have been through these cycles before and have been managing risk and building up capital reserves. Because of that foresight they will be better able to weather these challenging economic times.” Debt is another significant variable in the health of individual plants, Sneller noted. Many of Nebraska’s plants have been in operation for a period of time, allowing them to amortize much of that debt.
(Aurora News Register) -- As corn prices soar near the $8 mark, owners and managers at Nebraska’s 21 ethanol plants are focusing on risk management techniques with their ultimate success hinging on the ability to anticipate the cyclical nature of the commodities business. Most of the companies already up and running in the state “are on pretty solid ground” in that respect, according to Todd Sneller, administrator of the Nebraska Ethanol Board. These days, however, there is little room for error. “While we hear a lot about $7 and $8 corn, I suspect most Nebraska plants are not operating with costs at that level,” Sneller said. “Many of the managers I’ve talked to have been through these cycles before and have been managing risk and building up capital reserves. Because of that foresight they will be better able to weather these challenging economic times.” Debt is another significant variable in the health of individual plants, Sneller noted. Many of Nebraska’s plants have been in operation for a period of time, allowing them to amortize much of that debt.
