BIOF Q112 Conference Call Highlights
BIOF is one of GERS' largest customers. Cargill owns a large percentage of BIOF. Cargill supplies the corn and buys the ethanol from the BIOF plants, as well as other synergies. I'm very surprised how quickly BIOF ramped up the COES in the quarter, and I think they were too. Here's the corn oil comments from the CC.
"On the positive side, we began selling corn oil in the first quarter of 2012 which generated $2.7 million in revenues"
"Our plan was to focus on yield and co-product returns and specifically on getting our corn oil extraction systems fully on-stream while continuing to be disciplined on costs and operating safely."
"Our corn oil system commissioning began at the end of December in our Nebraska plant and about a month later in our Minnesota facility. During the quarter, both systems were successfully commissioned with very few issues."
"Revenue contribution for the quarter from corn oil was $2.7 million and we estimate this represents about a 67% rate over the quarter for full production compared to what we expect to realize."
"We'll see yields at or above planned and pricing stable in the $.40 range during this quarter."
"In 2012, our plan is to remain focused on yield optimization and realizing the benefits of our co-product improvements over the full year. Of coarse we'll remain focused on cost and risk management which are foundations of our operating plan."
"I talked specifically about corn oil earlier and as Kelly noted we saw similar incremental contributions from distillers grain in the quarter."
"We saw a significant improvement in distillers during the quarter and a similar incremental contribution to what corn oil represents."
"Corn oil commissioning went very well, over all. During the quarter we were able to consistently meet yields of .5 pounds per bushel of corn at each location. This outcome was better than our commissioning plan. Our Minnesota start-up did kick off 2 weeks later than anticipated but this was intentional as we sought to leverage the lessons learned from our Nebraska experience."
"In the current quarter, we are working with our proprietary design and are beginning to trial additives to drive yields higher. We will be careful to maintain quality of both corn oil and other co-products."
"We'll seek ways to optimize yield and co-product recovery to realize the lowest possible production costs and maximize margins."
"Corn oil values have also been pretty steady despite pretty significant amounts of supply that's been coming online. We're selling to both biodiesel producers and increasingly gaining traction as a feed ingredient to the feed industry."
Question...
What's co-product return as a percentage of corn cost?
"23% or 27% with corn oil."
"Our plants have been registered for E-15 sales"
The replay can be heard by calling (866) 281-6782. Access code 167702.
Good Luck To All!$!$!$!$!$!$!$!$!$
