Chairman’s Chat – Harmon Wilts – Summer 2024

CVEC Board Chair Article.

May 21, 2024

Thank you, Dave Thompson, for your 22 years on the board and 10 great years as board chairman.  CVEC is in a very good place because of Dave’s steady leadership and futuristic approach.  Enjoy your retirement. Thanks Dave.

As we write this letter 98% of the corn is planted and most of it is emerging very well.  Good sign that we will have corn to run the plant for the coming year.  Hopefully we have good weather to give a good quality corn as it really helps the plant be more efficient and make better quality products.

As we look forward there are several opportunities for us to consider that will have a large impact on the plant and profitability over the next 1-10 years.  Some opportunities are things we can control and others we can’t. Some of the big ones that we can’t control but can have some influence are; Summit Carbon Pipeline, E15 year around, SAF (Sustainable Aviation Fuel), political elections, GREET model, and Carbon Index scores.  These opportunities will all have large impacts on the industry. Four of your CVEC board members participated in the ACE(American Coalition of Ethanol) Washington DC Fly-in in March talking to legislators about the above topics.  CVEC is a member of three main organizations that are working to accomplish many of the topics important to the industry: American Coalition for Ethanol, Renewable Fuels Association and Minnesota Biofuels Association, as well as several of the Ag groups.

There are several important topics that the Board, Management and Staff focus on such asrunning the plant more efficient, adding Solar to cut power cost, helping expand the plant, focusing on reducing our CI Score on all fronts- mostly at CVEC and at the farm level.  We are investing time into looking how to grow the plant here at Benson which would do many valuable things for us. Some of those items are spreading cost over more gallons to reduce cost per gallon and make CVEC more profitable over time.  This will help upgrade some of the old equipment that needs replacing over the next few years.  As we grow the plant, we can put more focus on GGS to help drive more revenue.  One other advantage is CVEC would need to purchase more corn which in turn would increase the basis giving the farmer more per bushel.  Additional profits would be better for you as shareholders, as well.

Another major factor is our outside investments. They have continued to perform very well. Between CVEC, GGS and outside investments our future looks quite bright. However, if we are going to position CVEC for long-term success we will need to use some of the profits for future modifications and growth of the plant.

I also want to comment on the fact that we have a very good board that is focused on CVEC, as well as the Shareholders as we continue to move forward.  We have one of the best Management teams and staff in the country.

We look forward to seeing everyone at the September 5th informational meeting held at McKinneys in Benson.