Alto Ingredients Inc (ALTO)

[Rule_62]

Ok I'm just guessing here because I haven't really followed AVRW. There could be several reasons. Keepin mind AVRW is also buying for plants in Illinois.

1. The frequency of buys could affect the quarterly average price. Buying less often could result in having to buy at a more or less opportune time.

2. Hedging could affect the cost.

3. I believe PEIX gets better than market prices for their California plants because they lease out storage space at the Madera plant to a grain distributer. That gives them access to market priced grain right when they need it.

PEIX may also be able to access better prices due to increased volume. They may have established better arrangements from a regular supplier in Nebraska. This is also one of the potential upsides I see coming from the merger. They already purchase corn in Nebraska, and that volume is about to increase significantly. That may result in reduced costs overall when that purchasing power is combined.