PELHAM, Ga. -- Southwest Georgia Ethanol LLC, the state's largest ethanol facility, has announced a temporary halt in production citing higher corn prices in the Midwest for the decision. According to company officials, lower crop yields stemming from lengthy drought conditions are prompting the increased prices.
Uncertain aflatoxin levels have contributed to the rise as well.
Murray Campbell, president and co-founder of SWGE, said the move comes strictly as a response to market conditions and that the plant had the funds to delay Midwestern corn purchases even until the next crop year. In the meantime, the company is writing local contracts for 2013 corn and accepting grain sorghum that was planted for SWGE.
After emerging from Chapter 11 bankruptcy in December 2011, SWGE was granted $20 million in secured revolving credit to build up its physical supply of corn and for a hedge reserve to respond to varying prices in the futures market. According to the company, the account has been paid to a zero balance and remains in place
To supply its local ethanol customers, the Pelham plant is working with its distribution partner, Eco-Energy, to transport ethanol by railcar and by truck. Campbell said he foresaw no impending ethanol shortages for customers or end-consumers. Typically, SWGE purchases 20 to 25 percent of its corn products from local growers.
"We had an excellent corn crop in Georgia this year," Campbell said. "While we can't match the corn volume of the Midwest, it makes a great rotation crop for peanuts."
SWGE employees currently number 64, Campbell said, and while he plans to maintain a core group of skilled workers who can later ramp up production, he does anticipate some upcoming layoffs.