The ethanol facility uses corn to produce a capacity of 500 million liters of the biofuel every year and due to the high basis levels of corn the company has halted the production.
Valero Energy spokesman Bill Day said the company started with an organized shutdown because of poor margins in the ethanol industry.
"Corn prices have gone up and ethanol margins have gone down," Day said.
"Corn basis levels are high."
The high futures and basis levels are diluting the profits of the ethanol facilities in the region and the average margin is at a negative 22 cents per gallon.
Valero Energy is expecting to restart operations at the facility before corn harvest this year.
