As you read this newsletter the 2024 harvest is complete. Overall corn yields were better than expected, dryer than normal and good test weight. Quality corn is very good for our ethanol production. With the above average corn crop it is great to have CVEC. Without CVEC, think of what the price of corn would be. Good for farmers, good for our employees, good for our communities and good for all you shareholders.
Since our last newsletter we owed nearly 8 million dollars from the purchase of the KAPPA shares. Based on our CVEC plant and our outside investment gallons we were able to pay off the debt and have some cash in the bank as we speak. As you know we didn’t pay a dividend last spring. The Board felt it was more prudent to pay off the debt with the higher interest rates versus borrowing more to pay a dividend.
In paying dividends this fall Management and the Board will look at several factors of which some include, cash on hand, K-1 tax statement estimates, near term projects, audit, budget projections for next year as well as where we see the industry going. The final decision will be made at the November board meeting.
As we look to the future there are a great deal of opportunities for our industry. It is great that CVEC is diversified with fuel, industrial grade alcohol, corn oil, distiller’s grains, and organic alcohol. We are now starting to generate additional revenue from projects like corn kernel fiber. Finding ways to lower our Carbon Intensity (CI) score is a big deal to capture tax credits and revenue from the infrastructure bill passed by Congress. Some of the tax credit terms you will hear about are 40B, 45Z, 48C, etc. There are additional markets paying more for lower CI score as well. Lowering carbon score really comes down to two approaches: the first being what can we do at the plant to lower our energy use as well as produce more gallons; the second is farmers bringing in lower CI corn to the plant.
This year CVEC staff and your board have been learning and studying the possibilities that are out there as well as doing some engineering studies for plant improvements to put the plant is a great position to be a leader in the ethanol industry and to prosper now and in the future. We look forward to sharing the future path for CVEC over the next few months.
Thanks to our team at CVEC- the plant has run very well this year. We have one of the best management teams, staff and board in the country. Please put January 21, 2025 on your calendar for our annual meeting in Benson.
