Work Begins on Ethanol Plant in Cedar Rapids

By Dave Franzman, Reporter

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By Dave Franzman

Story Created: Nov 28, 2006 at 5:48 PM CST

Story Updated: Nov 28, 2006 at 9:41 PM CST

CEDAR RAPIDS - Cedar Rapids could soon become the corn processing capital of the whole world, and that latest step towards that title came Tuesday afternoon.

A ceremony marked the start of a 40-million-gallon-a-year ethanol plant at the Penford Products facility in southwest Cedar Rapids When this project is complete in late 2007 and when a much larger ADM expansion is finished in 2008 Cedar Rapids will process more corn on a daily basis than another other city.

Iowa already produces about 1.5 billion gallons of ethanol a year. All the expansions announced over the last year would double that statewide total. But will all that extra ethanol make it to market?

Economic developer Mark Seckman said some groups that announced plans earlier could be rethinking their investment.

"If the company has not made an announcement or started construction, I think you'll see them rethinking to invest in ethanol in Iowa at this point," Seckman said.

The situation is changing for a couple of reasons. The price of corn is shooting up due to demand from existing ethanol plants, and what producers get for a gallon of ethanol to mix with gasoline is down from record prices last spring.

One member of the Iowa Corn Farmers Association still thinks ethanol and bio-fuels is a big part of the future for grain farmers. But Larry Jons also wouldn't be surprised to see a few of the ethanol plans never make it to reality.

"If you can't make money on what you are invested in economics is what's going to make it balance," Jons said.

Penford officials say they looked at historic and not just record high ethanol prices in deciding the new Cedar Rapids plant made sense.

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