Granite Falls Energy Llc's Suppliers recorded an increase in sales by 19.57 % year on year in Q3 2022, sequentially sales grew by 18.25 %, Granite Falls Energy Llc recorded an increase in cost of sales by 20.97 % year on year, sequentially cost of sales grew by 6.57 % in Q3.
Granite Falls Energy Llc's Suppliers recorded an increase in sales by 19.57 % year on year in Q3 2022, sequentially sales grew by 18.25 %, Granite Falls Energy Llc recorded increase in cost of sales by 20.97 % year on year, sequentially cost of sales grew by 6.57 % in Q3.
Granite Falls Energy Llc's Comment on Supply Chain
Corn
Ethanol production requires substantial amounts of corn. At GFE’s current
production rate of approximately 62 millon gallons of undenatured ethanol per
year, the GFE plant requires approximately 21.5 million bushels of corn per
year. The HLBE ethanol plant requires approximately 22.1 million bushels of
corn per year to operate at is current production rate of approximately 64 million
gallons of undenatured ethanol per year.
The grain supply for our Granite Falls plant is obtained from Farmers Cooperative
Elevator Company (“FCE”), our exclusive grain procurement agent.
Our members are not obligated to deliver corn to our Granite Falls plant. We
will be forced to seek alternative corn suppliers if FCE cannot meet our needs.
The term of our agreement with FCE expires in November 2017.
Typically, HLBE purchases its corn directly from grain elevators, farmers, and
local dealers within approximately 80 miles of Heron Lake, Minnesota. HLBE generally
purchases corn through spot cash, fixed-price forward, basis only, and futures
only contracts. HLBE’s fixed-price forward contracts specify the amount
of corn, the price and the time period over which the corn is to be delivered.
These forward contracts are at fixed prices indexed to Chicago Board of Trade
(“CBOT”) prices. HLBE’s corn requirements can be contracted
in advance under fixed-price forward contracts or options. The parameters of
these contracts are based on the local supply and demand situation and the seasonality
of the price. For delayed pricing contracts, producers will deliver corn to
HLBE, but the pricing for that corn and the related payment will occur at a
later date. HLBE may also purchase a portion of its corn on a spot basis. For
its spot purchases, HLBE posts daily corn bids so that corn producers can sell
to HLBE on a spot basis.
In addition, both plants’ facilities have sufficient corn storage capacity,
with the capability to store approximately 8 days of corn supply at HLBE and
with the completion of our grain storage expansion project, approximately 18
days of corn supply at the GFE plant.
We compete with ethanol producers in close proximity for the supplies of corn
we will require to operate our plants. There are 8 ethanol plants within an
approximate 50 mile radius of HLBE’s plant and 5 ethanol plants within
an approximate 50 mile radius of the GFE plant. The existence of other ethanol
plants, particularly those in close proximity to our plants, increase the demand
for corn and may result in higher costs for supplies of corn. We also compete
with other users of corn, including ethanol producers regionally and nationally,
producers of food and food ingredients for human consumption (such as high fructose
corn syrup, starches, and sweeteners), producers of animal feed and industrial
users.
Since corn is the primary raw material we use to produce our products, the availability
and cost of corn can have a significant impact on the profitability of our operations.
Corn prices were lower during our 2016 fiscal year as a result of several consecutive
years of favorable corn crops which has increased the amount of corn available
to us. As a result of these favorable corn crops, we have not had difficulty
securing the corn we need to operate our ethanol plants at prices that have
allowed us to operate profitably. If we experience a drought or other unfavorable
weather condition during our 2017 fiscal year, the price we pay for corn and
the availability of corn near our plants could be negatively impacted. If we
experience a localized shortage of corn, we may be forced to purchase corn from
producers who are farther away from our ethanol plants which can increase our
transportation costs.
Utilities
Natural Gas
Natural gas is a significant input to our manufacturing process.
Electricity
Our plants require a continuous supply of electricity. We have agreements in
place to supply electricity to our plants.
Water
GFE obtains the water necessary to operate its from the Minnesota River with
an adjustable gravity-flow intake system.
Granite Falls Energy Llc's Comment on Supply Chain
Corn
Ethanol production requires substantial amounts of corn. At GFE’s current
production rate of approximately 62 millon gallons of undenatured ethanol per
year, the GFE plant requires approximately 21.5 million bushels of corn per
year. The HLBE ethanol plant requires approximately 22.1 million bushels of
corn per year to operate at is current production rate of approximately 64 million
gallons of undenatured ethanol per year.
The grain supply for our Granite Falls plant is obtained from Farmers Cooperative
Elevator Company (“FCE”), our exclusive grain procurement agent.
Our members are not obligated to deliver corn to our Granite Falls plant. We
will be forced to seek alternative corn suppliers if FCE cannot meet our needs.
The term of our agreement with FCE expires in November 2017.
Typically, HLBE purchases its corn directly from grain elevators, farmers, and
local dealers within approximately 80 miles of Heron Lake, Minnesota. HLBE generally
purchases corn through spot cash, fixed-price forward, basis only, and futures
only contracts. HLBE’s fixed-price forward contracts specify the amount
of corn, the price and the time period over which the corn is to be delivered.
These forward contracts are at fixed prices indexed to Chicago Board of Trade
(“CBOT”) prices. HLBE’s corn requirements can be contracted
in advance under fixed-price forward contracts or options. The parameters of
these contracts are based on the local supply and demand situation and the seasonality
of the price. For delayed pricing contracts, producers will deliver corn to
HLBE, but the pricing for that corn and the related payment will occur at a
later date. HLBE may also purchase a portion of its corn on a spot basis. For
its spot purchases, HLBE posts daily corn bids so that corn producers can sell
to HLBE on a spot basis.
In addition, both plants’ facilities have sufficient corn storage capacity,
with the capability to store approximately 8 days of corn supply at HLBE and
with the completion of our grain storage expansion project, approximately 18
days of corn supply at the GFE plant.
We compete with ethanol producers in close proximity for the supplies of corn
we will require to operate our plants. There are 8 ethanol plants within an
approximate 50 mile radius of HLBE’s plant and 5 ethanol plants within
an approximate 50 mile radius of the GFE plant. The existence of other ethanol
plants, particularly those in close proximity to our plants, increase the demand
for corn and may result in higher costs for supplies of corn. We also compete
with other users of corn, including ethanol producers regionally and nationally,
producers of food and food ingredients for human consumption (such as high fructose
corn syrup, starches, and sweeteners), producers of animal feed and industrial
users.
Since corn is the primary raw material we use to produce our products, the availability
and cost of corn can have a significant impact on the profitability of our operations.
Corn prices were lower during our 2016 fiscal year as a result of several consecutive
years of favorable corn crops which has increased the amount of corn available
to us. As a result of these favorable corn crops, we have not had difficulty
securing the corn we need to operate our ethanol plants at prices that have
allowed us to operate profitably. If we experience a drought or other unfavorable
weather condition during our 2017 fiscal year, the price we pay for corn and
the availability of corn near our plants could be negatively impacted. If we
experience a localized shortage of corn, we may be forced to purchase corn from
producers who are farther away from our ethanol plants which can increase our
transportation costs.
Utilities
Natural Gas
Natural gas is a significant input to our manufacturing process.
Electricity
Our plants require a continuous supply of electricity. We have agreements in
place to supply electricity to our plants.
Water
GFE obtains the water necessary to operate its from the Minnesota River with
an adjustable gravity-flow intake system.
GFGY's Suppliers Net Income grew by
GFGY's Suppliers Net margin grew in Q3 to
65 %
4.43 %
GFGY's Suppliers Net Income grew by 65 %
GFGY's Suppliers Net margin grew in Q3 to 4.43 %
Granite Falls Energy Llc's Suppliers Sales Growth
in Q3 2022 by Industry
Sources:
Granite Falls Energy Llc's official press releases and regulatory filings; CSIMarket.com's supply-chain research; and the financial filings and press releases of other companies cited in this report.
Updated on:
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