Farmers caught up in ethanol shakeout

Business Week
The Associated Press November 20, 2008, 4:57PM ET
By DIRK LAMMERS

SIOUX FALLS, S.D.
America's corn farmers, who have become closely tied to the nation's biofuel production, are getting caught up in some of industry's recent fallout.

Those supplying VeraSun Energy Corp., the nation's second largest ethanol producer, are being told the company doesn't necessarily have to honor its corn contracts under Chapter 11 bankruptcy protection.

VeraSun has the flexibility to reject existing contracts, but farmers and elevator operators remain bound by the terms they agreed to, said Roger McEowen, director of the Iowa State University Center for Agricultural Law and Taxation.

"A lot of farmers may feel that it's not fair, but that's the way the bankruptcy rules are right now," McEowen said Thursday.

Read the full story