Ethanol producer VeraSun files for bankruptcy protection as corn plummets
Such is the case for ethanol producer VeraSun which declared bankruptcy on Friday due to falling corn and ethanol prices. When it looked like a bad crop was likely to send corn prices through the roof, VeraSun committed to paying $8 per bushel for corn. Recently, corn has been selling at less than half that price and ethanol prices have plummeted at the same time. That left VeraSun holding contracts on some very expensive corn and not being able to sell the product at a high enough price to be profitable. The second-largest ethanol producer apparently lost up to $103 million on its price hedging and already has debts of over $1 billion.
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