Alto Ingredients Inc (ALTO)

[Rule_62]

I wonder how realistic it is for the Neeley model to use rack prices? I don't track the South Dakota rack & USDA reported plant numbers. I used to track Iowa, but as I learned more about PEIX ethanol purchase, I started tracking Nebraska instead. I'm also now tracking Illinois numbers, as they became relevant to PEIX with the impending merger. Here's a comparison (the numbers are weekly averages as of last friday, rounded to the nearest penny)

Neb. Rack: $1.54
Neb. Plant $1.30
(difference of $0.24)

Illinois Rack: $1.65
Illinois Plant $1.39
(difference of $0.26)

If a similar spread exists between rack and plant numbers for South Dakota, and it's more common for plants to receive the average rate plants are selling for, then the Neeley profitability number would be inflated. Might be a good question for DTN.

While the Neeley model does include DDGS, it looks like it doesn't include corn oil production. That would add 1-2 cents . . .

The weekly update for the plant numbers from Nebraska & Illinois should be out in a couple hours . . . on the bright side, while the PEIX margin still isn't great, it looks like Kinergy should be profitable again this week . . .