VeraSun delays start of 3rd ethanol plant

Last week, the company announced a delay in starting two other 110 million-gallon per year ethanol plants, one in Welcome, Minn., and the other in Hartley, Iowa. Both plants were completed this month. The third plant, also to be completed this month but now slated for a delayed startup is in Hankinson, N.D.

The company did not say when any of the three plants will start producing, but it did blame "current volatility in the market."

"Ethanol is currently being sold at a deep discount to unleaded gasoline, which has caused us to delay the startup of these facilities until the outlook for ethanol selling prices and overall margins improve," Chief Executive Don Endres said in a statement.

The delays are widely seen as the result of record high prices for corn, a key feedstock for the plants.

Corn for December delivery settled Tuesday at $7.475 a bushel on the Chicago Board of Trade. The contract hit an all-time trading high of $7.915 a bushel on June 16.

Corn prices have surged more than 80 percent in the past year amid sharp increases in global demand to feed people and livestock and make ethanol in the United States.

Earlier this month Citi Investment Research analyst David Driscoll said in a client note that rising corn prices could cut ethanol production by as much as 5 billion gallons per year.

VeraSun shares rose 6 cents to $4.04 in morning trading. The stock has traded between $3.84 and $17.75 in the past 52 weeks, and is down about 74 percent for the year.