JACKSON, Miss. (AP) — Bunge-Ergon will suspend ethanol production at its Vicksburg plant by the end of November, saying high corn prices make it impossible to profitably make ethanol.
Ergon spokesman Jim Temple said Bunge-Ergon would reassess market conditions and decide whether to resume operations in 2013.
"In the current market environment, the value of the ethanol produced at (Bunge-Ergon) is not keeping pace with the cost of the corn to make it," Temple wrote in an email.
The Vicksburg Post reports the plant's roughly 40 employees will be laid off.
The plant is a joint venture of the Dutch-based Bunge Group and privately-held Ergon, based in Flowood, Miss. Ergon, with $3.8 billion a year in revenues, operates refineries and other businesses and is controlled by the Lampton family. Ergon also operates an asphalt and lubricant oil refinery in Vicksburg and has a towboat company based there, with about 250 other employees.
A drought in the Midwest combined with high demand pushed up partly by ethanol production has raised corn prices. Corn futures fell 2.7 percent Friday after jumping Thursday on U.S. Department of Agriculture forecasts of tighter supply.
Geoff Cooper, vice president of research and analysis for the Renewable Fuels Association, says 25 of 211 ethanol plants nationwide are idle, about 12 percent. Cooper said it's hard for an ethanol refinery to pay $7 or $7.50 per bushel for corn but only be able to sell ethanol for $2.40 per gallon. But shutdowns could tighten the market for ethanol, reducing a current glut.