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Ethanol Plant Located in the Richest Topsoil in the WORLD! The Mississippi Delta
Southridge Enterprises will invest the $3.3 Million financing capital in what is planned to be the largest bio-refinery complex in the state of Mississippi, breaking ground on the plant by the end of 2007 and beginning production in 2008.
There are five major factors working for SORD in a positive way:
1. The price of corn
2. Federal subsidy of 51 cents a gallon
3. State of Mississippi subsidy
4. Federal and California Demand Ethanol Use
5. Financing in place
1. Price of Corn
The good news is that there is evidence that corn prices may fall further and that refiners plan to blend more ethanol in the near future.
Bear Stearns estimates demand of about 8 billion gallons of ethanol next year, which could bring corn prices down. That’s because the estimate translates into about 3 billion bushels of corn, lower than the U.S. Department of Agriculture’s estimate of 3.3 billion.
Corn is currently considered to be the relatively cheap grain when compared with wheat and soybeans.
While the values of other agriculture products have climbed in recent months, corn prices have remained within a confined range.
Corn prices topped $4 a bushel in June on concerns over the ability of supply to sate rising demand, particularly from a growing ethanol industry. But prices slid when the government estimated farmers would plant the largest corn crop since the 1940s. Corn then began to waver between about $3.20 to $3.50 a bushel.
Now the harvest is under way and the U.S. Department of Agriculture expects production to reach 13.3 billion bushels.
Corn prices have languished — albeit at historically high levels — wheat but and soybean prices have vaalted to record heights on varying combinations of tight supplies and robust world demand.
Corn looks relatively inexpensive enough to spur additional buying, analysts say. All three grains can be used to feed livestock and in some cases can be substituted when the price of one runs higher.
Wheat hit a record $9.07 a bushel last week, stretching the spread between wheat and corn to roughly $5.50 a bushel. That’s given the market a reason to push corn prices higher, even during what is shaping up to be a healthy U.S. harvest.
December corn rose 11 cents to settle at $3.6925 a bushel on the Chicago Board of Trade.
2. State Subsidy and 3. Federal Subsidy for Ethanol
This is all occurring while the thriving U.S. ethanol industry is receiving federal tax credits designed to help it during its infancy PLUS SORD is receiving State of Mississippi Tax Credits as well! This when coupled with high energy prices makes ethanol an attractive product.
Basically the federal government provides a 51-cent-a-gallon tax credit for ethanol blenders which ends at the end of 2010, though there is a strong effort to extend that period.
A recent study commissioned by The American Meat Institute, National Chicken Council and National Turkey Federation, found ethanol producers could afford to pay up to $5.21 per bushel for corn and still earn a return on their production.
With the price of oil per barrel near $80 ethanol production is an attractive proposition.
An estimated 25 percent of this year’s corn crop will be used to make ethanol, according to the U.S. Agriculture Department. Corn prices will average $3.10 per bushel in 2007/08.
Earlier this month, USDA estimated less corn — 3.3 billion bushels — will be used in making ethanol in 2007/08, down 100 million bushels from its initial estimate due to a decline in plant utilization and a slower pace of start-ups.
4. Federal Law and California Mandating Increased Ethanol Blend A major driver for increased production is California’s mandatory hike starting in 2010, in to boost the ethanol percentage from a 5.7 percent blend to 10 a percent blend may be approved by the end of the year.
A 2005 federal law requires use of 7.5 billion gallons of renewable fuels — ethanol for the most part — by 2012.
RFA estimated ethanol output of 6.5 billion gallons (24.6 billion liters) in 2007. An additional 6.6 billion gallons of capacity will be added in 2009.
Contact:
Alex Smid, 888-862-2192, ext. 3
http://www.southridgeethanol.com
Southridge Enterprises, Inc.
3625 N. Hall St.
Suite 900
Dallas, TX 75219
Phone: (214) 347.9473
Email: info@southridgeethanol.com
Website: http://www.southridgeethanol.com
About Southridge Enterprises, Inc. – Southridge Enterprises is a renewable energy company with a mission to become the ethanol producer of choice in the southeastern region of the United States. The Company is focusing its efforts in an area which offers abundant supplies of corn, superior transportation infrastructure and expedited permitting processes. The Company is actively acquiring and developing ethanol production facilities and anticipates start-up of the first phase of these operations in 2007. Southridge Enterprises is headquartered in Dallas, Texas. For more information, please visit our website: www.southridgeethanol.com
Forward-Looking Statements – This news release contains “forward-looking statements,” as that term is defined in Section 27A of the Act and Section 21E of the Securities Exchange Act of 1934. Statements in this press release, which are not purely historical, are forward-looking statements and include any statements regarding beliefs, plans, expectations, or intentions regarding the future. Such forward-looking statements include, among other things, successfully equipping the Quitman County plant for the production of ethanol, and the startup of production of in 2008, if at all.
Actual results could differ from those projected in any forward-looking statements due to numerous factors. Such factors include, among others, the inherent uncertainties associated with the development of an early stage company in the alternative energy industry, its products, and the entry into new markets for such products. These forward-looking statements are made as of the date of this news release, and the Company assumes no obligation to update the forward-looking statements, or to update the reasons why actual results could differ from those projected in the forward-looking statements. Although the Company believes that the beliefs, plans, expectations, and intentions contained in this press release are reasonable, there can be no assurance those beliefs, plans, expectations or intentions will prove to be accurate. Investors should consider all of the information set forth herein and should also refer to the risk factors disclosed in the Company’s current and periodic reports filed from time to time with the Securities and Exchange Commission.
Disclosure: Pentony Enterprises LLC has been compensated $10,000 directly from the company for profile coverage. Pentony Enterprises is not a registered investment adviser or a broker/dealer. Pentony Enterprises LLC makes no recommendation that the purchase of securities of companies profiled in this web site is suitable or advisable for any person, or that an investment in such securities will be profitable. In general, given the nature of the companies profiled and the lack of an active trading market for their securities, investing in such securities is highly speculative and carries a high degree of risk.
KEYWORD: Mississippi Texas
INDUSTRY KEYWORD: Energy Alternative Energy Alternative Vehicles/Fuels Automotive Environment
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