Charles City, IA- They've been burned once by the ethanol industry, Now area farmers are warming up to the new owners of the troubled plant in Charles City.
Representatives from Texas-based Valero are talking with corn producers at the plants they bought from Verasun.
Erwin Johnson is one of thousands of farmers who lost money to Verasun.
"Once you get burnt, once you put your hands on a hot stove, you don't necessarily go right back and put your hands on it again,” he said.
Valero energy is trying to change that image.
"We're gonna need that ethanol, Valero is the largest refining and marketing company in North America, we make a lot of gasoline and we need a lot of ethanol to blend into the gasoline," said Valero spokesman Bill Day.
The senior vice president of Valero Renewables says they're less likely to fall victim to a commodity market swing like Verasun.
"The ethanol that we make is less than the ethanol that we purchase in the market, so for us we have already the ehtanol pricing risk in the market, actually the synergy between the two businesses actually eliminates risk," said Jim Gilingham, Senior Vice President.
As the number ten company on the fortune 500 list, Valero’s capital also makes it less susceptible to short term changes in corn prices.
Now that the plant has new ownership, the biggest question for area farmers is what happens to their old corn contracts.
Verasun's bankruptcy voided the old contracts, but Valero is giving those farmers 40 percent of the difference between the market price and the price on the old contract.
"They're gonna create this alcohol from our corn and they're gonna put it directly into they're refineries and I think that this is a plus."
Johnson says he's remaining skeptical about the ethanol industry.
"Verasun I swallowed the whole hook with them, now I’m gonna be a little more cautious and about how I’m dealing with Valero."
Valero representatives are hoping to hold a grand opening ceremony sometime in late June or early July.
They're still working on getting the plants running at full capacity
85 percent of the old Verasun corn producers are signing a contract with Valero.
