The South Dakota Corn Growers Association (SDCGA) is encouraged by a move today from Valero Energy Corp to offer corn contract holders a portion of their original contract agreement held at former VeraSun plants.
Valero is offering to pay corn suppliers spot price plus 40 percent of the amount above spot price specified in their previous VeraSun contract, according to Valero spokesman Bill Day. Suppliers whose contracts were set below the current market prices were allowed out of their contracts.
“The SDCGA sees this as an act of goodwill on Valero’s part extended to the corn producers surrounding these plants, which is a step in the right direction for Valero to build trust with feedstock suppliers,” said Bill Chase, president of the SDCGA. “Offering an option for producers implies Valero understands the importance production agriculture will have in the success and viability of their ethanol facilities.”
Four of the seven plants Valero purchased are currently operating and the company plans to steadily ramp up production at the other facilities.
“As Valero continues its efforts to bring former VeraSun plants up to operational capacity, their commitments to the industry will strengthen surrounding communities and bring faith back into these important markets for producers,” said Chase.