Des Moines Resister article today...
"With corn prices soaring, Iowa landowners plan to remove nearly 316,000 acres from a land-conservation program between this fall and 2010"
Couple of other recent articles.
Report: Squeezing profit from ethanol to get harder
The findings are prepared for Congress. Much depends on what happens to the price of oil, economists say.
By PHILIP BRASHER
REGISTER WASHINGTON BUREAU
Washington, D.C. - High corn prices could wipe out much of the profit in the ethanol industry for years to come, economists say.
Net operating returns for the ethanol industry will drop to 28 cents a gallon this year, down from 61 cents last year, according to a report prepared for Congress by the University of Missouri's Food and Agricultural Policy Research Institute.
The economists see the operating margin slipping eventually to 19 cents a gallon by 2012. Plants need to make about 20 cents a gallon to cover capital costs, so the decline in margins will discourage construction of plants, said Pat Westhoff, the institute's program director.
"That slows investment dramatically," he said.
But a lot depends on the price of oil, Westhoff said.
The price of ethanol tends to follow the price of oil and gasoline. The estimates in the research institute report are based on projections that the price of oil will fall from about $60 a barrel last year to $50 a barrel by 2016.
David Nelson, chairman of Global Ethanol LLC, which operates a plant at Lakota, said oil prices are likely to be higher. "I'd be surprised if the world is going to keep it at $50 a barrel," he said.
The report predicts U.S. ethanol production rising sharply in the next couple of years, as new plants come on line, then expanding relatively slowly from 2010 through 2016.
Economists see a similar crunch for biodiesel due to the soaring price of soybeans.
Ex-Iowa workers are sued to shield ethanol secrets
They worked in Jewell and learned confidential methods before switching jobs, the lawsuit says.
By JEFF MARTIN
SIOUX FALLS (S.D.) ARGUS LEADER
In a case that underscores how competitive the ethanol industry has become, an ethanol maker is suing two former Iowa employees to protect its trade secrets and keep them from a rival.
Broin and Associates claims it has developed technology that make its ethanol plants some of the most profitable in the industry.
In a federal lawsuit, Broin says two employees of a Broin-affiliated ethanol plant in Jewell, north of Ames, learned confidential information and trade secrets about Broin's ethanol production methods.
Then, the Iowa employees left to work with Colorado's first ethanol plant - a direct competitor of Broin, the lawsuit alleges.
In going to Colorado, the employees broke agreements not to compete with Broin, according to the lawsuit.
Broin has designed, engineered and built more than 25 ethanol plants across the United States, and is building one of the first plants to produce ethanol from corn cobs, in addition to the grain.
Defendants in the lawsuit are Gary T. Hanson, former operations manager at the Horizon Ethanol plant, which began operations about one year ago.
Also named as a defendant is Robert A. Akers, a former maintenance technician at Horizon.
"Broin and Associates licensed to Horizon Ethanol proprietary technology, design information, and operational information," the lawsuit states. "The licensed technology included trade secrets, formulas, research data, processes, know-how, and specifications related to Broin and Associates' design and construction of the ethanol facility."
Hanson resigned from the Iowa plant Dec. 18 and became affiliated with Sterling Ethanol LLC in northeast Colorado, according to the lawsuit. Akers resigned Jan. 22 and also went to Sterling, Broin maintains.
Those job moves violated agreements that they not compete with Broin-affiliated plants, the lawsuit states.
Akers' lawyer, Stu Cochrane of Des Moines, said the lawsuit misrepresents the situation.
For one thing, Cochrane said, Akers was not involved in producing ethanol. Rather, he was a maintenance worker who made $13 an hour, and he went to Colorado to try to make a better life for his family, Cochrane said.
"He wouldn't know a trade secret if he saw one," Cochrane said. "He had nothing to do with anything that was remotely confidential for that plant. He essentially fixed broken equipment."
Akers had no contact with customers, wasn't involved in marketing efforts, and "the suggestion that he's now harming them is ridiculous." Cochrane added that Akers "is no threat in any way, and he never has been."
Hanson could not be reached Tuesday for comment.
Sioux Falls lawyer Tim Shattuck, who is representing Broin and Horizon, said it's their policy not to comment on pending lawsuits.
Among other things, Broin's lawsuit seeks injunctions preventing the two men from working with Sterling, and stopping them from sharing confidential information.
Sterling Ethanol has 30 employees and operates 24 hours a day.
Its owners are building another plant 40 miles south of it. They have plans for three more facilities, the Rocky Mountain News newspaper of Denver reported in January.