Of course PEIX doesn't receive LA pricing for all their sales. In fact until recently, 60% of their own production (now 50%) comes from areas that are geographically distant from LA.
That's without discussing the fact that the total volume of ethanol sold in Q1 was 112.8 million gallons (Q1 10-Q, pg 22). Of that, just going by nameplate capacity they would of only produced approx. 15 million gallons in California (60M/4). The balance (72.8M) is 25M gallons of production from Boardman and Magic Valley (100/4), leaving approx 73 million gallons in 3rd party marketing arrangements as well as 3rd party buys and sells made by Kinergy. Given that we know there are two other plants in the California marketing pool, and given that we know those are the plants they provide marketing for as opposed to the other 3rd party transactions they conduct;
We market all the ethanol produced by four ethanol production facilities located in California, Idaho and Oregon, or the Pacific Ethanol Plants, all the ethanol produced by two other ethanol producers in the Western United States and ethanol purchased from other third party suppliers throughout the United States
if someone wanted to break out the production of the pool partners, we could further break that down to get a better idea of volume produced in California as opposed to out of state. We don't know where the other purchases are made, however, again given that Kinergy operates in 8 states;
Serving integrated oil companies and gasoline marketers who blend ethanol into gasoline, the Company provides transportation, storage and delivery of ethanol through third-party service providers in the Western United States, primarily in California, Arizona, Nevada, Utah, Oregon, Colorado, Idaho and Washington. (Q1 10-Q, pg 18)
and given the volume they market beyond their own production, again I would certainly not expect them to receive California pricing for all their transactions. As Kel points out, we really can't know the full extent of purchase and sale prices when it comes to the dealings of Kinergy. However, we do know what the PEIX operating model is for their own plants, including product distribution. That model includes local distribution.
They do state that they received an average price of "$2.70 for the three months ended March 31, 2014" compared to an average CBOT price of "$2.20 for the three months ended March 31, 2014." (Q1 10-Q, pg 22).
They make a number of statements regarding their arrangements for the storage and procurement of corn, as well as distribution of ethanol. In fact, when it comes to their customer base, they state
The majority of our sales are generated from a small number of customers. During 2013 and 2012, three customers accounted for an
aggregate of approximately 52% and 49% of our net sales, respectively. (Q1 10-Q, pg 40).
That's half of their total sales going to 3 different customers. Even if one of them is Chevron, they clearly purchase significantly less than half of Kinergy's total sales. In addition, there's more than enough room to sell to independents in that remaining half of total sales.
Thanks for the link to California corn prices. I'll add that as another column to my table. It would be nice to find a different basis for comparison across states where PEIX has plants, but for now, rack prices at least provides some basis for comparison across the local markets where the PEIX plants are located.
News 
Market Data 
Discover 
AI
