GARNETT — Production at East Kansas Agri-Energy’s ethanol plant here will be suspended Oct. 1.
Bill Pracht, chairman of the board, cited in an e-mail to the Register the ongoing drought as the reason for production suspension, noting the negative impact it had had on availability of corn and rising prices for the grain. Corn prices at major markets Monday approached $8 a bushel, a number that futures markets maintained through December in trading Monday.
Also, Pracht said the demand for gasoline was down, resulting in surplus ethanol stocks.
These challenges led the company to reduce production capacity by 20 percent on April 1, he said. The production suspension was termed temporary, but with no time frame to resume business.
“We have studied the situation extensively and with the challenging economic conditions the board of directors has determined that it is in the best interests of the company and its shareholders to halt production,” Oct. 1. “We will monitor the situation with the hope to resume production … as soon as market conditions allow,” he said.
The company has 35 employees and a portion of the staff will be affected by the production suspension. Exact numbers were not released.
“Every effort will be made to treat our employees as best we can,” said Pracht. “Many of our employees have been with the company since the plant opened. Knowing the impact that this decision has on our communities and families made the decision even more difficult.”
East Kansas Agri-Energy was formed in 2001 to construct and operate the ethanol plant. Production began in 2005 at 42 million gallons a year. Much corn raised in Allen County has been converted to ethanol at the plant.
