BioFuel Energy cancels new ethanol plant, cites low market prices; initiates stock buyback

BioFuel Energy announced that it will stop construction on a third new ethanol facility, owing to low ethanol prices. The company initiated a $7.5 million buyback of its stock in response to a 35 percent fall in its share price in the past 30 days.

The halt comes as three Australian plants were halted and four in the US in the past two weeks.

In Minnesota, Agassiz Energy announced a suspension of its $115 million ethanol plant near Erskine owing to financing difficulties associated with high corn costs and reduced ethanol prices. Last week, three firms suspended construction or halted production at ethanol plants in the Midwest. Glacial Lakes Energy’s plant in Meckling, SD, Chippewa Valley’s 40 Mgy plant in Benson, MN and the Alchem ethanol plant in Grafton, ND received the axe. All companies said that the fall in ethanol prices were the cause of the decision.

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