This past fall, North Dakota offered a glimpse into the hyperactive ethanol market. The state is a relative newcomer to the industry, in part because it is not a major corn producer compared to South Dakota, Iowa or Illinois.
Over the past 18 months or so, ethanol production nationwide has roughly doubled to meet federal mandates for ethanol. That glut of supply has pushed prices too low for some. In October, Alchem, based in Grafton, N.D., and one of the older ethanol plants in the country, stopped production and laid off about 30 people. It hasn't been alone; several new ethanol plants in Minnesota and South Dakota have also been temporarily mothballed.
Most believe ethanol prices will rebound—a matter evident in the many projects still going forward just in North Dakota. The Alchem plant is expected to reopen eventually, and work continues on three new ethanol plants in North Dakota, each of them capable of spitting out 100 million gallons a year when completed. Then in November, the state's Agricultural Products Utilization Commission awarded two $50,000 grants to study the feasibility of building new ethanol plants in Nelson and Bowman counties, each producing 55 million gallons a year.
—Ronald A. Wirtz
