Still, the headline seems unnecessarily harsh: The money issue is almost entirely due to bad choices by our government and the plant management. The plant locked in a long-term contract to sell its oil at $40 per barrel, while prices are now considerably higher. The plant was turned down for a biofuel tax credit that would've given them a credit of about $42 per barrel. (Which is just bizarre -- are turkeys not biological?!) And because the USDA still hasn't banned feeding animal offal to other farm animals (as had been expected after the mad-cow scare), the turkey offal remains a commodity that has to be purchased, instead of waste that Butterball would pay to have taken off its hands, adding about $47* to the cost of producing each barrel.
* The plant processes 270 tons a day to produce 300 barrels, and the cost of the offal is $52 per ton. Some simple ratio multiplication says: (52 dollars / 1 ton) * (270 tons / 300 barrels) = (46.8 dollars) / (1 barrel).
The article says the total cost to produce each barrel is currently about $80. Fix the policies, and the company could give away the oil and still make money: ($47 current cost of offal) + ($22 estimated value if taking away offal was a service) + ($42 tax credit) - ($80 current cost) = ($31 profit per barrel), even if the sale price is zero.
Roy Blunt, the Republican Congressman who represents the district in which the plant is located, has been leading the charge to try to keep the plant in business. Perhaps it would be worth sending him some emails pointing out exactly what policies need to change for the plant to become profitable. I don't agree on much of anything with Blunt -- he's one of the hardcore 'wingers, on most issues -- but I'll gladly take his support for a good alt-energy technology.