Iowa ethanol company sues marketing partner for $7 million
Southwest Iowa Renewable Energy (SIRE) is suing Bunge North America for $7 million in damages due to alleged errors in marketing and selling fuel-grade ethanol. SIRE claims Bunge’s inexperienced staff sold ethanol at incorrect values and failed to submit necessary paperwork for California sales after a key employee left in November 2022. The lawsuit, filed in US District Court for the Southern District of Iowa, seeks damages for breach of contract and unjust enrichment, citing daily losses from October 2022 to December 2023.
An Iowa company is suing its marketing partner for $7 million in damages caused by alleged errors in attempting to sell fuel-grade ethanol produced in Iowa and Nebraska.
Southwest Iowa Renewable Energy, or SIRE, is a Council Bluffs-based company that has hundreds of member ethanol producers in Iowa, Nebraska, Wisconsin, Minnesota, and 18 other states. It is suing a Missouri company, Bunge North America, with whom it partnered to sell SIRE-produced ethanol.
SIRE is a dry-mill grain processing facility that each year produces millions of gallons of fuel-grade ethanol from grain that originates in southwest Iowa and southeast Nebraska. Bunge is an agronomic business focused on the purchase, storage and eventual sale of products, including ethanol, within North America.
In the ethanol market, it’s common practice for ethanol producers such as SIRE, to contract with ethanol marketers tasked with finding buyers who are willing to purchase the commodity at the highest possible price and then negotiating with rail lines and trucking companies to achieve the lowest possible rates for shipping the ethanol.
In order to do all of that, the lawsuit alleges, ethanol marketers must have expertise related to complicated and ever-changing federal and state renewable fuel standards.
In 2020, SIRE contracted with Bunge to market and sell all of SIRE’s ethanol in return for a monthly fee. The lawsuit claims that until November 2022, Bunge successfully marketed SIRE’s ethanol though a single Bunge employee, Jeremy Ragan, who was conversant with ethanol buyers and well versed in SIRE’s objectives.
However, at the end of November 2022, Ragan informed SIRE that Bunge had terminated his employment. In the weeks that followed, the lawsuit claims, Bunge had inexperienced workers trying to market SIRE’s ethanol but who sold the product at old or incorrect values. In addition, the lawsuit accuses Bunge of failing to submit the necessary paperwork order for it to sell SIRE’s ethanol in California.
The lawsuit alleges that those and “other deficiencies and errors have resulted in SIRE losing profits on, at times, a daily basis … Bunge’s deficient marketing services have cost SIRE at least $7 million dollars between October 1, 2022, through December 31, 2023. SIRE’s damages have continued to accrue daily.”
The lawsuit, filed this week in U.S. District Court for the Southern District of Iowa, seeks “at least $7 million,” plus interest, for breach of contract and unjust enrichment.
Bunge has yet to file a response to the lawsuit. Company officials have not returned calls seeking comment.
Source Link : https://iowacapitaldispatch.com/2024/07/30/iowa-ethanol-company-sues-marketing-partner-for-7-million/
Recommended for you
