Minnesota Energy says it plans to close ethanol plant in Buffalo Lake; 20 will lose their jobs

(Article by Tom Cherveny, published in West Central Tribune)

The Minnesota Energy ethanol plant in Buffalo Lake is closing, putting 20 people out of work.

The decision to suspend ethanol production was a difficult and painful one, but necessary, according to Randy Byro, chairman of the board for the farmer-owned ethanol plant and grain handling cooperative.

“Margins, margins, margins,” he said. The operation has been losing money in recent months and its near-term financial prospects continued to look negative, he said. It’s the only ethanol plant in the state’s top corn-producing county.

The closing doesn’t affect the company’s grain handling and agronomy operations in Buffalo Lake, Stewart, Cosmos, Lake Lillian, Eden Valley or Darwin.

Byro said the ethanol plant will reopen if market conditions improve. He said the cooperative would need to see a 50-cents-to-75-cents-per-gallon upswing in prices before it would consider reopening the facility.

The facility opened in 1997 and has a rated capacity of 19 million gallons per year, making it one of the smallest ethanol plants in the state.

The plant’s closing was difficult news for Buffalo Lake due to the loss of jobs and economic activity it represents, according to Mayor Joyce Nyhus.

It comes exactly one year after the community saw the closing of its largest employer, Minnesota Beef Industries, formerly known as North Star Beef.

Nyhus, however, remains optimistic. She said the possibility now exists for the ethanol plant to be sold and would likely be suitable for other types of production.

Our Take:
Not only do we need immediate approval of the waiver for E15, extension of ethanol blender’s tax credits and the tariff that protects the still maturing domestic ethanol industry—we need what many politicians across the Midwest and the whole nation have talked about—an aggressive, comprehensive energy program that fully supports the development of alternative fuels—wind, solar, biofuels.

Otherwise, look for small plants like Buffalo to either close down or go out of the hands of farmers and into the hands of oil companies. When ownership leaves town, it’s a significant reduction to the economic impact of farmer-owned ethanol.

The alternative to the pro-ethanol stance can mean only one thing—using more foreign oil, at an ever higher cost to our economy, our security and our environment.

The latest news tells us that the American Meat Institute opposes many of these pro-ethanol measures. Buffalo Lake is a prime example of how this divided thinking leads to untimely and damaging economic disruption. It’s time for all value-added agriculture to work together to promote government policies that create strong markets for all the products that increase the share of local profits, and local jobs by adding value to what comes from the farm.

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