Some Notes On Pacific Ethanols Outlook for Q3
The locations of our plants near multiple rail lines provide options on where to source our corn. Quality and supply of local corn near our plants are not impacted by the drought in the Midwest. We also have access to, and have recently procured, alternative feedstocks to corn such as milo. Our proximity to the Western ports provide us the opportunity to procure imported feedstock. And West Coast markets for ethanol tend to trade stronger premiums to Midwest markets as supplies tighten. In addition, our risk management practices are aimed at securing margins at favorable levels
we do expect an increase in the blending of up to 15% ethanol and gasoline as the EPA has approved and permitted blends at that level. Midwest gas stations have begun offering the 15% ethanol blend, beginning a trend that we expect to expand across the country.
PEIX E15 registration has prepared us to benefit from this meaningful regulation as it becomes more prevalent in our markets in the months and years ahead
we increased the amount of the plants' revolving credit facility by $5 million to a total of $40 million to provide additional immediate liquidity for the plants' operations.
As of June 30, we had total unused lines of credit of nearly $32 million with immediate access to $13 million in availability.
(So they had $40 mln/then as Of June 30th they had $32 mln) Corn Hedging?
they Also had Imediat Access to another $13 mln to Hedge Before July Corn Price Run Up.
At the Time of Working Up Q2 10Q they had 865,000 Bushels Already Hedged,According to 10Q
Milo Cost Advantage per Bushel to Corn as Of Friday
Milo December 2012 $7.37 Old Crop
Milo December 2013 $5.91 New Crop
Corn December 2012 $7.97 Old Crop
Corn December 2013 $6.36 New Crop
New Yeast Process Savings
Mascoma & Lallemand Yeast Product Savings
$ 2.0 million more into the company as saving on consumption of enzymes.
Selling Carbon Credits,Now Produced at a Cellulosic Rate Because of Milo Use
forwards and options have cleared on the exchange, largely in the $15-$18 range.
from Conf. Call
The Low Carbon Fuel Standard is very much in place. There continues to be some legal activity. But what had been a temporary injunction to not implement the program was stayed, and the program is very much back in force. That continues to provide a couple of cents premium for our product, and certainly, all indications are is that we go into another doubling of that requirement of carbon reductions next year, and the compliance schedule continues to slope up pretty steeply that those values will become greater. Well, companies are taking it very seriously. They have a very keen interest in staying aligned with the ethanol that we market since we market all of the lowest carbon ethanol produced in California through Kinergy from the Pacific Ethanol plants and the 2 other marketing agreements. OPIS has recently started to post both a dollars per ton and a cents per carbon point. So we're seeing more price discovery, more activity around trading of credits. We expect that to ramp up as well in 2013.
(Keep In Mind,They Have Increased thier Ownership % from 34% to 67%/this Will Double Earnings.)
Location,Location,Location
Higher Priced West Coast Ethanol
