SIOUX CENTER—The closure of the Sioux Center ethanol plant is a hard hit in three ways for one rural Hawarden man.
Siouxland Energy Cooperative announced Monday, Sept. 16, that the plant has halted production.
Steve Rehder is one of Siouxland Energy Cooperative’s 385 shareholders and one of the ethanol plant’s nine board of directors that helped make that decision.
He’s also a crop farmer who brings some of his corn to the plant each fall and feeds the plant’s byproduct of wet distillers grains to his cattle.
“This is a big deal. I’m sick about it because I want to deliver too,” Rehder said. “Emotions are going to run high; that’s the scary part. I know farmers are totally capable of adjusting, we’ve done it all our lives but the emotions upfront — people are going to be upset — that’s the first hurdle we'll have to work through.”
The board decided to halt production due to President Donald Trump’s recent grant of small-refinery exemptions, or SREs, to many large oil refineries, which has undermined the Renewable Fuel Standard and reduced ethanol demand by 4 billion gallons.
The ethanol plant doesn’t plan to accept any corn for this harvest season.
“As a board member, that’s very disheartening,” Rehder said. “The markets have created a situation that’s out of our control. It’s very disheartening because this is something that’s been really successful for so many years. At the beginning of the year we were in great shape too. It went down hill so fast, it went from bad to worse the last two months.”
As a crop farmer, Rehder said the closure means he’ll have to dry more corn.
Annually Rehder brings 50,000-70,000 bushels of corn to the ethanol plant, or 25-30 percent of his 1,400 corn acres.
“Basically when all bins are full we would market extra corn to the ethanol plant,” he said. “The corn we brought in could carry a little moisture and not be docked for it like we would at other places.”
Looking head, Rehder said he’ll need to grind more corn to replace the wet distillers grains, which usually makes up 30-35 percent of his feed rations. He’s down to 20-25 percent currently “because of the plant scenario now,” he said.
Rehder feeds up to 800 head of cattle through the winter.
“As long as I can have 10-15 percent, I think I’ll be all right but I still have make up that difference some how,” he said. “Using distillers was just a touch cheaper than corn itself. It also has a protein value I could save on.”
He also viewed the wet distillers grains as a consistent product when corn can vary in moisture content.
“For me the distillers is a buffer, using the distillers makes the rations more palatable,” he said. “I remember back it day, feeding cattle they’d get to the point where they’re full and had enough. I could never constantly stay at a spot. It seemed like they get too much, back off and I was always changing my rations. Now I can get to a point, and stay at that point. To me I call it that ace in the hole or that buffer spot.”
And it’s a valuable product in early fall, he said, as silage piles are nearly depleted, which also means more dry corn is being added to feed rations.
“There’s so much value, especially now, we’re going to feel it if we run out of that product,” he said.
Closing the ethanol plant “is going to free up a lot of corn and I think lower price of the corn because either the farmer is going to put it all in his bin and try to sell it later or the elevator is going to be more flooded with corn,” Rehder said. “And elevators can’t unload corn quite as fast as you can at the ethanol plant. I’m afraid there could be a little bit of tension involved there because you’re going to have to wait in line longer. No one likes to do that. That’s why we, as a plant, wanted to get information out as quick as we could so farmers can make plans.”