ADM studies options as ethanol margins decline

ADM studies options as ethanol margins decline

Tight ethanol margins stimulate company to take long-term look at industry.

ADM is concerned about the long-term future of the dry mill ethanol industry and is conducting a strategic review.

“They have an adviser helping them on that and we’re going to run through the different scenarios all the way from one extreme to the other when we will explore all the scenarios,” said ADM CEO Juan Luciano in a Feb. 2 conference call.

ADM is studying the dry mill ethanol industry. (Photo: Fuse/Thinkstock)

“We just want to be prepared to look at the industry long-term and see, can this industry present the returns that we expect and what are the options to maximize our return for ADM? So there is not a clear timeline or real clear direction in what we really want to see,” Luciano said. “We want to see the analysis of the options that the team will bring.”

Here’s a sampling of reports:

Blooming Business: ADM studies options for corn dry mills as ethanol margins slump
ADM, the largest U.S. ethanol producer, is looking at strategic options for its dry mills.

Nasdaq: Archer Daniels Midland misses revenue, profit expectations
Archer Daniels Midland is pushing to cut costs as the strong U.S. dollar and growing glut of grain supplies erode profits.

Reuters: Ethanol pioneer ADM’s struggle reflects deepening industry woes
Relatively stable corn prices and tumbling crude oil prices have squeezed ethanol margins.

Ethanol Producer Magazine: ADM reports Q4 earnings of 61 per share, down from $1 a year ago
“Global dynamics reduced margins across the U.S. agricultural export sector, the U.S. ethanol industry and in the soybean crushing industry worldwide.”

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