BioFuel Energy Corp. said Wednesday that ethanol production has begun at new plants in Nebraska and Minnesota.

The facilities in Wood River, Neb., and Fairmont, Minn., will have the combined capacity to produce 230 million gallons of fuel and 720,000 tons of dried distillers grains, a byproduct often sold as animal feed, per year.

The plants are located next to decades-old Cargill grain elevators and Union Pacific (nyse: UNP – news – people ) main rail lines. BioFuel has a contract with Cargill to provide corn for the plants and distribute its products