Another US Ethanol Producer In Trouble
Two months after opening an ethanol plant in Fairmont, Minn., Buffalo Lake Energy has been foreced to access to a $20 million line of credit from its parent firm to keep its furnaces burning.
The price of corn, at nearly $6 a bushel, is more than 2 1/2 times higher than when the Buffalo Lake Energy plant was announced in 2005.
Meanwhile in a government filing Friday, BioFuel revealed it had lost $39 million on hedging and related financial agreements with Minnetonka-based Cargill, Inc.
"Cargill has not yet been paid for approximately $22 million of these amounts," BioFuel said in a report to the Securities and Exchange Commission.
"The parent company currently does not have sufficient liquidity to retire these obligations," said BioFuel, whose subsidiaries operate the Fairmont ethanol plant and another in Wood River, Neb.
"The operating subsidiaries have received approximately $25 million of parent company corn inventory that it has not been reimbursed for," the company disclosed.
BioFuel said talks with Cargill aim to find a solution to the problem. "However, there can be no assurances that these efforts will prove successful," it said.
The price of corn, at nearly $6 a bushel, is more than 2 1/2 times higher than when the Buffalo Lake Energy plant was announced in 2005.
Meanwhile in a government filing Friday, BioFuel revealed it had lost $39 million on hedging and related financial agreements with Minnetonka-based Cargill, Inc.
"Cargill has not yet been paid for approximately $22 million of these amounts," BioFuel said in a report to the Securities and Exchange Commission.
"The parent company currently does not have sufficient liquidity to retire these obligations," said BioFuel, whose subsidiaries operate the Fairmont ethanol plant and another in Wood River, Neb.
"The operating subsidiaries have received approximately $25 million of parent company corn inventory that it has not been reimbursed for," the company disclosed.
BioFuel said talks with Cargill aim to find a solution to the problem. "However, there can be no assurances that these efforts will prove successful," it said.