Grain Bins


SDCGA statement on Valero comment about corn contracts

Posted on April 02, 2009

The South Dakota Corn Growers Association (SDCGA) is disappointed following a statement made by a Valero Energy Corp spokesperson in a news article today, calling the comment complete indifference for corn contract holders in VeraSun plants which Valero recently purchased.

In referring to VeraSun’s contracts for corn, the spokesperson said: “We bought hardware – not contracts.” Valero intends to enter new contracts with feedstock suppliers.

“It’s discouraging for Valero to decouple their purchase from the very foundation feeding the ethanol plants themselves,” said Bill Chase, president of the SDCGA. “The SDCGA urges Valero to build relationships with corn suppliers close to each ethanol plant and not cripple the infrastructure and confidence of the feedstock suppliers. Valero’s ability to access feedstock close to their plants will increase their success in the ethanol industry.”

On the positive side, Valero has made the commitment to run the plants at full capacity.

“On behalf of corn producers, we appreciate that Valero realizes the value-added benefit of extracting the starch and providing a valuable feed product for our livestock industry,” said Chase. “We are glad to learn they are taking the steps necessary to run these plants at full capacity.”

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