SoyMor stops producing biodiesel

GLENVILLE — The SoyMor Biodiesel plant suspended production of biodiesel Friday as a result of high prices for

 soybean oil.

Gary Pestorious, the chairman of the SoyMor Board of Governors, said the board made the decision Thursday

afternoon. He said the plant has been running less than 15 days per month during the last four months.

“ After analyzing it for months, the board had to shut it down for a while,” he said.Whether the shut down is temporary depends on the price of soybean oil, diesel fuel and the strength of the U.S. dollar, Pestorious said.  He said the Board of Governors believes in the American market and that it will improve — eventually. “I believe it will change. I can’t tell you when,” Pestorious said.

A notice posted Friday on the Web site for SoyMor reads:

“Due to current biodiesel economics the Board of Governors of SoyMor Biodiesel LLC are suspending the production of biodiesel at this time. SoyMor’s Board of Governors has reviewed all possible alternatives regarding the plant’s operations and have concluded that the suspension of production is the most prudent decision to ensure long-term viability of SoyMor.”

The rising price of soybean oil has put a squeeze on the American biodiesel industry. Many plants have stopped production and others have slowed. According to the U.S. Department of Agriculture, soybean oil makes up about 80 percent of the operating cost for biodiesel plants.

A big jump in soybean oil prices came in 2007. During that year, the price went from 28 cents to 45 cents a pound. It has steadily grown  since.   

                                                                                                                                                      

The longtime record for soybean oil had been 45 cents a pound from 1974, but these days commodity trades above 60 cents. The Chicago Board of Trade closing price Friday for March soybean oil was 62 cents per pound; January soybean oil closed at 64 cents.

Pestorious said the price is about 10 cents too high for SoyMor’s viability. He said the board will look at alternative sources for making biodiesel, such as corn oil or animal fat. He said the board also is hoping the market will rectify itself.

“High prices cure high prices,” he said.

The weakened U.S. dollar also hurts because it makes U.S. products cheaper compared with European goods. Pestorious said foreign countries can buy American soybeans for food cheaper than they could before.

There are slightly more than 30 employees at SoyMor. The plant is about one mile west of Glenville.