AURORA, S.D. — Valero began its move to corn country like any new neighbor would.
It grilled up some burgers and brats.
Executives from the big, Texas oil refiner traveled this week through farmlands from South Dakota to Iowa, trying to soothe the nerves of farmers that will supply their new ethanol plants.
Valero snapped up ethanol plants for 30 cents on the dollar from VeraSun Energy Corp. which has entered bankruptcy protection. It was just one casualty of a major shake-up in the ethanol industry.
In doing so, the nation’s largest independent oil refiner became ethanol’s third largest player.
David Fremark was one of about 50 farmers who tore themselves away from spring planting on a rare 90-and-sunny day this week to eat and talk shop under a giant white tent outside of what was Verasun’s flagship plant in Aurora, S.D.
For Fremark, who spent much of the past year watching one ethanol producer after another declare bankruptcy, it wasn’t too difficult to extend a hand to Valero, whose billions in assets and healthy balance sheet provide a bit of security given recent turmoil in the ethanol market.
Fremark sold 20 percent of his corn to Verasun before the bankruptcy, and he acknowledged that a year earlier, he might have been more comfortable with a farmer-owned enterprise.
"In the end what matters is, ‘Is my check good when I sell my product there?’ and I think we aren’t going to worry about that with Valero,” said Fremark, of Miller, west of Valero’s Aurora plant.
Companies that rushed into the ethanol business, many without a big capital base, were bowled over when corn prices soared. That’s not a problem for Valero, which reported revenues of $13.82 billion in the first quarter and plunked down $477 million for Verasun’s assets.
"There was a lot of curiosity about who Valero is and certainly some concern about an oil company coming here from Texas,” spokesman Bill Day said Thursday from Iowa. "We just wanted to talk with them about new contracts and the reception has been extremely positive.”
by the associated press
It grilled up some burgers and brats.
Executives from the big, Texas oil refiner traveled this week through farmlands from South Dakota to Iowa, trying to soothe the nerves of farmers that will supply their new ethanol plants.
Valero snapped up ethanol plants for 30 cents on the dollar from VeraSun Energy Corp. which has entered bankruptcy protection. It was just one casualty of a major shake-up in the ethanol industry.
In doing so, the nation’s largest independent oil refiner became ethanol’s third largest player.
David Fremark was one of about 50 farmers who tore themselves away from spring planting on a rare 90-and-sunny day this week to eat and talk shop under a giant white tent outside of what was Verasun’s flagship plant in Aurora, S.D.
For Fremark, who spent much of the past year watching one ethanol producer after another declare bankruptcy, it wasn’t too difficult to extend a hand to Valero, whose billions in assets and healthy balance sheet provide a bit of security given recent turmoil in the ethanol market.
Fremark sold 20 percent of his corn to Verasun before the bankruptcy, and he acknowledged that a year earlier, he might have been more comfortable with a farmer-owned enterprise.
"In the end what matters is, ‘Is my check good when I sell my product there?’ and I think we aren’t going to worry about that with Valero,” said Fremark, of Miller, west of Valero’s Aurora plant.
Companies that rushed into the ethanol business, many without a big capital base, were bowled over when corn prices soared. That’s not a problem for Valero, which reported revenues of $13.82 billion in the first quarter and plunked down $477 million for Verasun’s assets.
"There was a lot of curiosity about who Valero is and certainly some concern about an oil company coming here from Texas,” spokesman Bill Day said Thursday from Iowa. "We just wanted to talk with them about new contracts and the reception has been extremely positive.”
by the associated press
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