Two years ago at the Fuel Ethanol Workshop in St. Louis, it was standing room only at the workshop on hedging and locking in what were high margins. Tuesday, the breakout session on "understanding true risk management" at the 2009 Workshop in Denver wasn't quite so crowded.
The St. Louis workshop was crowded with potential investors as well as farmers who own ethanol plant stock and memories of $2 a gallon profit margins were fresh. As Will Babler of First Capital Risk Management put this year, "You just as well could have owned an ethanol plant as the Denver Mint because they were really throwing out cash."
Today, an industry with capacity to make 13 billion gallons is putting out only about 10.5 billion gallons after several companies, including one of the largest, VeraSun Energy, went bankrupt.
source: agriculture
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