Southwest Georgia Ethanol Idles Mill on Unprofitable Margins

Southwest Georgia Ethanol idled its plant in Camilla, Georgia, as higher corn prices made production of the biofuel unprofitable.

The distillery has the capacity to produce 100 million gallons of ethanol annually.

“We idled it due to the corn prices,” Murray Campbell, the company’s president, said in a telephone interview. “We hope to come back up sooner rather than later.”

Southwest Georgia’s move follows Abengoa SA (ABG)’s Oct. 1 decision to shut its Madison, Illinois, ethanol mill temporarily because of poor margins after the worst U.S. drought in 56 years scorched cornfields and raised production costs for the biofuel.

Denatured ethanol for November delivery declined 0.4 cent to $2.402 a gallon today on the Chicago Board of Trade. Futures have gained 9 percent this year.

Corn for December delivery dropped 1.5 cents to $7.545 a bushel in Chicago. The grain has risen 17 percent this year. One bushel makes at least 2.75 gallons of ethanol in the U.S.

Southwest Georgia has enough liquidity to cover expenses until next year’s corn harvest “but will be ready to ramp up production earlier, given the proper market opportunities,” it said in an e-mailed statement.

To contact the reporter on this story: Mario Parker in Chicago at mparker22@bloomberg.net

To contact the editor responsible for this story: Dan Stets at dstets@bloomberg.net