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    Farmland's Troubles Persist

    Poor fuel margins causes company to reduce oil refinery runs output.

    KANSAS CITY, Mo. -- Farmland Industries, the nation's largest farm cooperative, is operating its oil refinery in Coffeyville, Kansas at less than capacity because of recent poor refining margins and not because of the company's bankruptcy filing.

    The refinery has been running at 80,000 barrels per day rather than its capacity of about 95,000 barrels per day, company spokeswoman Sherilyn Manson told Reuters.

    "We've got plenty of crude coming in," said Manson, who said Farmland could produce up to capacity if it desired. The cutback is related to market conditions and that the Coffeyville refinery will in the next two months raise production to capacity as market conditions warrant.

    Reuters said the company was also fighting rumors that it was operating at less than capacity because it was not able to get financing to buy enough crude. Farmland on June 1 sought Chapter 11 bankruptcy protection when it failed to make a $10 million debt payment.

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