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U.S. BioEnergy Corn Contracts Cancelled by VeraSun

VeraSun Energy announced Tuesday that nearly all contracts to buy corn for its U.S. BioEnergy ethanol plants through Jan. 15, 2009 would be canceled.

During a bankruptcy hearing, VeraSun lawyer Felicia Perlman said that contracts for plant in Welcome, Del. would be cancelled through Jan. 31, 2009. However the Marion, S.D. U.S. BioEnergy plant was not included in the planned cancellations. The eight U.S. BioEnergy plants were acquired by VeraSun earlier this year.

The bankruptcy court approved a measure that would allow VeraSun to cancel corn contracts 10 business days before delivery.

Last month VeraSun decided not to honor corn purchasing contracts at several of its locations, instead offering spot market prices to producers. According to attorney Joe Peiffer, who represents farmers engaged in contracts with the ethanol producer, VeraSun does not anticipate accepting corn contracts for any plant that are locked in above the current market price.