SOUTH BEND – As the last bit of Randy Matthys’ 2012 harvest dumped from the semi into the silo, it sounded a lot like the “ka-ching” of money in the bank.
“We’ve always been sending anywhere from 80 to 90 percent of our crop over to the ethanol plant here,” Matthys said of the New Energy Corp. ethanol plant about 5 miles down the road from his Crumstown farm.
When it opened on West Calvert Street in 1984, Matthys said he was one of the first to contract with the plant.
Since then, he’s made good money.
But days after confirming it, the company laid off 40 workers and temporarily shut down production for the winter months. The ethanol plant also filed for Chapter 11 bankruptcy. The filing date was listed as November 8.
It is also up for sale. According to court documents, the United States Energy Department isn’t giving New Energy Corp. any more government money, and the ethanol plant is already in way over its head, owing some $50 to $100 million to its creditors.
“You knew something was happening. Even up until that point they were not taking as many trucks in a day,” Matthys said of the last few months. “Where they were taking 100 trucks a day, they were maybe taking 50 to 100 trucks a week. You could tell they were slowing down.”
Notre Dame economics professor Tom Gresik told WSBT ethanol production is nearly at a standstill nationwide. It’s a much different situation than 2006 when panic about rising oil prices caused a huge push toward the search for alternative energy sources.
“Corn farmers obviously love ethanol. It increases corn prices, but it's not the economic savior we were hoping for,” Gresik said. “There's all sorts of problems with ethanol production. Not only is it more expensive to produce, mileage is lower from ethanol, it creates more smog, it's more volatile and it evaporates more in the summer.”
According to some reports, New Energy is one of at least 10 ethanol plants in the country temporarily shut down after last summer's drought. It’s just one factor that raised corn prices to the highest they’ve ever been.
For Matthys, the local shut down is making his decision about where to send his yield the toughest it's been in a long time.
“Do we ship corn to another ethanol processor 80 miles south or do we do it right here, on closer rail terminals?” he asked. “And you know, it just depends how close they are and price and what it costs to get it down there.”