Southwest Georgia Ethanol is temporarily shutting down its plant in Mitchell County, in what is only the latest setback for the company and for Georgia’s beleaguered biofuels industry.
The largest biofuels plant in the Southeast emerged from bankruptcy at the start of 2012 with renewed optimism, but CEO Murray Campbell says that optimism faded as drought decimated the Midwestern corn crop.
"It’s really raised corn prices and ethanol prices have not necessarily followed it, and the margins aren’t good," Campbell said. "We’ve made the decision it’s in our best interest to just sit on the sidelines and let the markets correct themselves."
The company is a consortium of southwest Georgia farmers, but it imports much of its corn from the Midwest. Sam Shelton, research director at Georgia Tech’s Strategic Energy Institute calls that a doomed business model.
"They can process that corn in existing ethanol plants out in the Midwest where most of the corn is grown and then ship the ethanol over here a lot cheaper than they can ship the corn," Shelton said, chuckling.
Campbell says he may have to wait until the next local corn harvest in July 2013 to resume production. In the meantime, layoffs among the plant’s 64 employees are likely.