(Adds company statement, details on plant downtime)
NEW YORK/CHICAGO, Sept 17 (Reuters) - Major U.S. ethanol producer Green Plains Inc is shutting down or cutting output at plants across the Midwest due to low profit margins, five industry sources told Reuters on Monday.
The slash in production comes after the Trump administration's escalating trade disputes cut off U.S. access to ethanol markets in China, contributing to a domestic supply glut that has pushed biofuel prices near their lowest levels in over a decade.
Green Plains idled until further notice its facility in Superior, Iowa, and soon will shut down the plant in Lakota, Iowa, while the company's plant in Fairmont, Minnesota, was running at half of its capacity, according to three of the sources, who asked not to be named.
Two additional sources, both ethanol traders, said even more plants had been shut down or cut production.
"Theyre taking down some of their best-performing assets," said one trader, mentioning plants in Fergus Falls, Minnesota and Bluffton, Indiana.
Company spokesman Jim Stark confirmed the Superior plant was temporarily shut down. "Lakota is running and so is Fairmont. We don't comment on run rates at any particular plant," Stark said in an email. He declined to comment on Fergus Falls or Bluffton.
Green Plains said in an Aug. 30 regulatory filing it was reassessing production levels based on current market conditions.
Green Plains has annual ethanol production capacity of roughly 1.48 billion gallons, making it about tied with Valero Energy Corp as the No. 3 ethanol maker in the United States, behind POET LLC and Archer Daniels Midland Co.
The company said in a May filing it was considering selling some of its assets. Another source familiar with the company said on Monday it was now actively seeking to sell them. Asked for comments about potential sales, Green Plains spokesman Stark said only that its "portfolio optimization plan" would be completed this year.
The U.S. Environmental Protection Agency under former administrator Scott Pruitt issued waivers to some oil refiners exempting them from requirements to blend ethanol into the U.S. gasoline supply. The waivers, coupled with trade tensions between the United States and China, have pressured prices for ethanol.
Green Plains has invested in cattle feedlots and vinegar production in efforts to diversify from biofuel.
Last week, privately held Ergon Inc said it would permanently close its only ethanol plant, in Mississippi.
Ethanol output typically declines in September and October as operators perform maintenance to prepare equipment ahead of the new corn harvest. Some plants were likely to extend downtimes this year because of poor profitability.
The U.S. Energy Information Administration last week said average ethanol output dropped 67,000 barrels per day to 1.02 million bpd, the lowest since April. (Reporting by Jarrett Renshaw and Chris Prentice in New York, and Michael Hirtzer in Chicago Editing by Cynthia Osterman and Matthew Lewis)