(Lincoln Journal Star) -- The financial crisis gripping Wall Street has spilled over into grain markets. It got much of the blame for the corn price falling the daily limit last week on the Chicago Board of Trade and for many of the state’s grain elevators, in the middle of harvest, not to post cash bids. The more immediate concern to corn farmers might be a sustained price slide that had wiped out much of the gain set in motion in 2006 by robust demand from the ethanol and export sectors.
From Oct. 13, 2006, the value of a bushel of corn at Frontier Cooperative in Brainard, Neb. rose from $2.83 to a high of $7.18 on June 27. It dipped below $4 on Oct. 7 and has lost another 30 cents since then ($3.70 on Monday).
A year ago, Auburn Mayor Bob Engles was promoting a 12-mile-long pipeline to the Missouri River as an important step toward hosting an ethanol plant there. Now the sense of urgency for that $7 million to $8 million project has diminished and possibilities for a $200 million ethanol outlet have stalled out with the dirt-work stage. The credit market for ethanol dried up last year, Engles said. “With the recent developments on Wall Street, that certainly hasn’t improved that.” Todd Sneller of the Nebraska Ethanol Board conceded “the most difficult period in recent history to secure new financing for a new ethanol plant.” That’s particularly true if the project team has no other operating ethanol plants. But Sneller said he can feel good about new plants opening at Wood River and Bridgeport, to a third getting close at Atkinson, and to a federal ethanol mandate that calls for 15 billion grain-based gallons by 2012.
From Oct. 13, 2006, the value of a bushel of corn at Frontier Cooperative in Brainard, Neb. rose from $2.83 to a high of $7.18 on June 27. It dipped below $4 on Oct. 7 and has lost another 30 cents since then ($3.70 on Monday).
A year ago, Auburn Mayor Bob Engles was promoting a 12-mile-long pipeline to the Missouri River as an important step toward hosting an ethanol plant there. Now the sense of urgency for that $7 million to $8 million project has diminished and possibilities for a $200 million ethanol outlet have stalled out with the dirt-work stage. The credit market for ethanol dried up last year, Engles said. “With the recent developments on Wall Street, that certainly hasn’t improved that.” Todd Sneller of the Nebraska Ethanol Board conceded “the most difficult period in recent history to secure new financing for a new ethanol plant.” That’s particularly true if the project team has no other operating ethanol plants. But Sneller said he can feel good about new plants opening at Wood River and Bridgeport, to a third getting close at Atkinson, and to a federal ethanol mandate that calls for 15 billion grain-based gallons by 2012.
