8.8 percent of US ethanol plants in bankruptcy; expected to rise to as high as 22 percent, says banker

In Nebraska, a principal at the Ag & Food Associates told the Des Moines Register that consolidation is imminent in the ethanol industry with 16 plants now in bankruptcy, and 24 more expected to join them. Mark Lakers was speaking at the 2008 American Bankers Association’s Agricultural Bankers Conference. Lakers said that he doubted that Big Oil would play the consolidator role.

Five of Iowa’s 32 ethanol plants are in Chapter 11 bankruptcy, all of them owned by VeraSun Energy. 40 bankruptcies would represent a 22 percent failure rate, based on the 182 ethanol plants reported by the RFA to be in operation. Currently, the failure rate is 8.8 percent.

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