Indiana’s 13 plants distilling the automotive fuel ethanol could soon be sputtering as drought dries up the supply and boosts the price of corn, their main ingredient.
Strain in the nation’s fourth-largest ethanol-producing state became apparent June 26, when Valero Energy temporarily idled its 110-million-gallon plant in Linden.
San Antonio-based Valero cited challenging margins caused by higher corn prices.
Over one period last month, the future price of a bushel of corn jumped from around $5 to $6.33.
“I’m not a weather forecaster,” said Purdue agricultural economist Wally Tyner, but “if drought continues through summer … that’s bad news for ethanol producers.”
At stake are about 600 jobs at the state’s ethanol plants, along with the livelihoods of Indiana farmers who supply 431 million bushels of corn each year to make more than 1 billion gallons of alcohol fuel.
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