Ethanol Crash Leads Green Plains to Invest $400M to Shift Business to Animal Feed
A crash in ethanol prices had led leading U.S. ethanol company Green Plains Inc., to announce its intentions to shift its business away from ethanol to high-protein, corn-based animal feed production. The decision is seen by the company as the only way to survive long-term in the industry that has a bleak market outlook, as U.S. demand for motor fuels declines, and the current administration continues to waive biofuel blending requirements for an increasing number of refiners.
However, demand for high-protein animal feed remains high. Over the coming two-to-three years the company plans to invest approximately $400 million across its 13 production plants to achieve the switch away from its strategy of higher ethanol output and the sale of distillers dried grains (DDGs) for cow and swine feed. Moving forward, ethanol will be relegated as a low-margin co-, or byproduct resulting from feed production. After investing $35 million at the site, Green Plains will begin producing feed with 50 percent protein at its plant in Shenandoah, Iowa, this month.