SoyMor waits for good market

Published 9:30 am Thursday, July 31, 2008

In March, SoyMor Biodiesel announced it was suspending production due to the price of soybean oil and diesel as well as the weakening U.S. dollar. SoyMor Board of Governors member Jerry Janzig on Wednesday said the board has been meeting and discussing options but there are no plans to reopen yet.

“It takes several pieces for it to work,” Janzig said. “It definitely is getting closer.”

The Board of Governors keeps in contact and is constantly talking about possibilities, he said. However, the different options for the company are still in negotiations, so he couldn’t specify.

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Board Chairman Gary Pestorious told the Tribune in March the plant had been running less than 15 days a month for the previous four months. High prices for soybean oil and a worsening economy have closed many biodiesel plants across the country.

For the plant to reopen, Janzig said soybean oil prices need to go down or diesel prices need to go up so SoyMor can lock in a profit.

“For us that’s not possible right away,” he said.

SoyMor closed its doors March 14, and the plant’s 30 employees went on unemployment. Janzig said he hadn’t heard anything about the status of the company’s employees or if they were still on unemployment.

In 2007, the price of soybean oil — which makes up 80 percent of operating cost for biodiesel plants according to the U.S. Department of Agriculture �� jumped from 28 cents to 45 cents a pound.

When the plant shut down in March, soybean oil was trading above 60 cents and hasn’t gone down yet. The Chicago Board of Trade closing price for Tuesday was 62 cents a pound.

The longtime record of soybean oil prices had been 45 cents a pound in 1974.

It is still unsure when — or if — the plant will reopen, but Janzig said he is hopeful.

“It’s still a very viable company,” he said. “We didn’t close down because we were in trouble. We closed down because we didn’t want to get into trouble. We fully intend to operate again.”

SoyMor is managed by Renewable Energy Group, based in Ames, Iowa, and announced at the end of March it withdrew its initial $150 million public offering because of commodity prices and adverse market conditions.