On Friday, Reuters reported on what everyone paying attention to the alternative fuel market already knew: biofuel markers are succumbing to untenable market conditions:
Soaring corn and soy prices on top of rising construction costs and tight credit markets have pushed about a dozen U.S. biofuel plants to file for bankruptcy protection, experts said.To this equation you can also add the biblical deluge that the Midwest is currently experiencing and intensifying scrutiny of the biofuel vs. food. End result? A bad situation for biofuels is only going to get worse.
Companies succumbing early include Renova Energy LLC and Ethanex Energy Inc. And while bigger and more diversified players are able to avoid the ax to this point, they're being forced to make adjustments that werre unthinkable a year ago. Case in point: industry bellweather VeraSun will delay the opening of three ethanol plants with a total capacity of 330 million gallons per year.
