High corn prices halt ethanol production in Vicksburg - WLOX.com - The News for South Mississippi

High corn prices halt ethanol production in Vicksburg

VICKSBURG, MS (WLBT) -

For the last four years, Bunge-Ergon in Vicksburg has been turning corn into ethanol. Now, the plant is turning away from its ethanol production, all thanks to a record high spike in corn prices.

"It is a concern because you don't want anybody losing their jobs in Mississippi and it does produce that. But it's kind of typical for ethanol plants right now," said Agriculture and Commerce Commissioner Cindy Hyde-Smith.

Hyde-Smith said droughts in the mid-West are the main culprit behind the approximate $7.50 per bushel price of corn. That's something Hyde-Smith said wasn't expected. Because of it, Ergon will suspend production of ethanol by the end of November, then reassess marketing conditions and decide whether to start up again next year.

"When it's so expensive, you just have to weigh those input costs with what you're going to actually get for your product," said Hyde-Smith.

In an industry often touted for its job creation, with the suspension of production comes layoffs. The Department of Employment Security is working with those impacted through rapid response teams. With the high cost of production, the Mississippi Development Authority is keeping a close eye on what it could mean for the state and its renewable resources.

"Whether this is a trend or not is yet to be determined. This is one company. It's a large deal for the people involved, but the energy sector has many facets," said MDA Spokesman Dan Turner.

Hyde-Smith said a suspension in production doesn't mean the plant will cease to exist. It's just a break until the market loss on corn can adjust.

"One year, something is really profitable. Five years from now, it may not be as profitable. Just like cotton is not king right now, but it was for a long time," said Hyde-Smith. "Those cycles normally come back."

Hyde-Smith said the corn prices aren't just affecting ethanol producers and petroleum products. It's also causing problems in industries like cattle, poultry and catfish, all of which mean jobs and money in Mississippi.

Copyright 2012 WLBT. All rights reserved.

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