CHS Sues Abengoa for Underpaid Corn Deliveries, Plant Closed – DTN

    CHS Inc. has not been paid nearly $5 million for some 2 million bushels of corn the cooperative delivered to three Abengoa Bioenergy SA ethanol plants in Nebraska and Kansas, according to an amended complaint filed in U.S. District Court in Nebraska Thursday.

    In addition, two sources told DTN/The Progressive Farmer on Friday that Abengoa has stopped production and laid off employees at its cellulosic ethanol plant in Hugoton, Kansas.

    Abengoa, the alternative energy giant based in Spain, earlier this week sought protection from creditors in what news reports said was an initial step toward bankruptcy.

    The Nebraska Ethanol Board told DTN/The Progressive Farmer on Friday it has received maybe 10 calls from farmers airing concerns about the operational status of the plants in Nebraska.

    As of Friday, no one answered telephones at the Ravenna, Nebraska, plant. In addition, the Nebraska Ethanol Board said there are employees at the plant in York but the plant is not in operation.

    Kelly Brunkhorst, executive director of the Nebraska Corn Board, said so far farmers have not expressed concern about not receiving payment for corn delivered. By and large, he said, farmers sell and deliver corn to cooperatives and others that provide feedstocks to the Abengoa plants in York and Ravenna.

    “We started hearing about this as reports were coming through the news media,” Brunkhorst said. “We visited with board members in the areas and nobody was concerned about getting paid yet.

    “As you start hearing this and seeing (plants closed for) routine maintenance, the concern is when will they start production?”


    In an amended lawsuit filed in U.S. District Court on Thursday, CHS Inc., a major corn feedstock provider to Abengoa’s plants in Nebraska and Kansas, said the company has not been paid for corn already delivered to the plants starting in July.

    Between July 2015 and October 2015 Abengoa purchased “at least 4,976,076 bushels of #2 yellow corn” from CHS and delivered to the Nebraska plants and the corn ethanol plant in Colwich, Kansas, according to the complaint. In all, the complaint alleges Abengoa did not pay for about 1.9 million bushels at a price of about $4.9 million.

    When contacted by DTN a spokesperson for CHS said the company’s policy is to not comment on lawsuits.

    “Despite the fact that the defendants accepted delivery of all of the corn referenced in the invoices, the defendants have not paid the plaintiff for such corn,” CHS said in its lawsuit. “Upon information and belief, the defendants have used the corn to produce certain ethanol products in the course of their business, which products the defendants or the defendants’ affiliates sold to their customers…

    “The plaintiff has demanded payment of the amounts due, but as of the date hereof, the defendants have failed and refused to pay for the corn purchased from the plaintiff. By refusing to pay the amounts due, as set forth in the invoices, the defendants breached their contractual obligations.”

    CHS indicated in the complaint that it has for “several years” provided Abengoa with “millions of bushels of corn.”


    Neal Gillespie, director of the Stevens County Economic Development Board in Hugoton, Kansas, told DTN/The Progressive Farmer, “There were numerous layoffs this week” at Abengoa’s cellulosic plant near that town.

    Podcasts > Talking Crops

    Unable to display feed at this time.

    Hugoton’s City Clerk Tom Hicks said an Abengoa representative came to the town council’s Nov. 9 meeting and told members the plant would be closing for the winter and reopen in April.

    Hicks said the Abengoa representative at that time explained the company had some technology issues to work out during the winter. In a Friday interview, Hicks said he understood most of the local plant employees were laid off this week from the plant which is one of the larger employers in town. Among those laid off was the regional Abengoa representative who had talked to the council, Hicks said.

    “Yes it is (closed) and we hope Abengoa opens it back up or somebody else take over,” Hicks told DTN.

    Abengoa received more than $200 million in U.S. Department of Energy loan guarantees and cost-share grants to launch the Hugoton project designed to process some 1,000 tons of biomass per day. That includes corn stover, wheat straw, milo stubble and switchgrass.

    In multiple news articles earlier this year, Abengoa said the company was paying $15 a ton for residue harvested off fields. The company was looking to contract with as many as 200 farmers in a 100-mile radius of the Hugoton plant. Abengoa contracted with a custom harvester to work with farmers and landowners.

    Abengoa officials based in Spain earlier told DTN/The Progressive Farmer the company would continue ethanol production at its plants in North America while trying to work out agreements with creditors to save the company.

    Typically when ethanol companies file for bankruptcy — which Abengoa has not done at this point — a pecking order of creditors is established. Usually companies like CHS with relatively large outstanding contracts are placed at or near the top of a list of creditors.

    DTN/The Progressive Farmer’s attempts to reach Abengoa officials in Spain this week were unsuccessful.

    DTN Ag Policy Editor Chris Clayton contributed to this story.

    The Latest

    Send press releases to

    View All Events

    [ecs-list-events limit="5" key="start date" order="asc"]
    Send press releases to

    View All Events