The financial failure of a large ethanol company with three plants in Nebraska has farmers who have contracts with the company searching for answers.
The financial failure of a large ethanol company with three plants in Nebraska has farmers who have contracts with the company searching for answers.
The state Department of Agriculture has responded by scheduling two more workshops for farmers in Ord and Central City, where ethanol plants owned by VeraSun Energy Corp. have been idled. VeraSun, the nation’s second-largest ethanol producer, filed for bankruptcy in October.
The third Nebraska plant owned by VeraSun, in Albion, is still running.
Director Greg Ibach of the Nebraska Department of Agriculture said the large turnout at an Albion workshop earlier this month prompted the decision to schedule more of them.
About 45 people came to the Albion workshop, said Christin Kamm, spokeswoman for the Department of Agriculture.
“We’ve got producers in limbo,’’ Kamm said.
An attorney will be on hand at the workshops in Ord and Central City to help farmers sort through the options they have in the aftermath of the VeraSun bankruptcy.
They generally have three options, according to Scott Merritt, executive director of the Nebraska Corn Growers Association: Get out of their contracts to deliver corn to the plants and market it elsewhere; deliver the corn but get paid the market price at the time of delivery instead of the price they had in their contracts, which could be significantly higher; or deliver and wait in line with the rest of the ethanol company’s creditors.
“You’ll be at the back of the line,’’ Merritt said of the last option.
Because the circumstances at each plant are different and the contracts vary, Merritt urged farmers with VeraSun contracts to proceed carefully and contact an attorney to help find the proper course to take.
The National Corn Growers Association has set up a Web page to provide farmers with information on the bankruptcy.
Marian Beethe, a program director at the state Department of Agriculture who is helping conduct the workshops, said farmers who have contracts with VeraSun “don’t know which way to go.’’
“Are they going to get paid, do they have to deliver, will the contract change?’’ Beethe said, describing the questions farmers have about the so-called forward contracts. In such contracts, farmers agree to sell grain at an agreed-to price and deliver it at a later date.
The answers, she said, “are not as concise as what they’d like to hear.’’
The workshops are scheduled for Jan. 6, starting at 9:30 a.m. in the Central City Community Room and at 2 p.m. at the First United Methodist Church in Ord.
Posted in Govt-and-politics on Monday, December 29, 2008 6:00 pm Updated: 3:03 pm.
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