A chain of truck stops partially owned by Berkshire Hathaway is buying an ethanol plant “just as the beleaguered industry may be turning around,” according to a recent article in Yahoo Finance.
Last month, Green Plains Inc. reportedly announced a plan to sell a 65-million-gallon ethanol plant to GreenAmerica Biofuels Ord LLC. for $64 million. GreenAmerica is a unit of Tennessee-based Pilot Co, the largest operator of travel centers and truck stops in the U.S.
Berkshire Hathaway owns 38.6% of Pilot, so the deal puts Buffett’s firm “in a position to benefit if fuel demand picks up as more Americans are vaccinated and as exports to countries such as China increase.” The article notes that Berkshire’s BNSF Railway already transports the biofuel around the country.
While ethanol producers have faced difficult times due to corn prices (used to make the fuel) “surging as China ramped up imports from the U.S. to feed its hog herds.” Concurrently, demand for gasoline and ethanol dipped because of pandemic-related lockdowns.
But the article reports that ethanol prices have been “steadily climbing since Joe Biden won the White House, stoked by the new president’s commitments to address climate change and his criticism of refinery waivers issued under Donald Trump.”