Midwest ethanol producers are facing falling prices, a tight credit market and possible overbuilding — which raises questions about whether the industry is in a temporary slump or a severe downturn.

The cost of corn, a major raw ingredient of ethanol, has swung wildly this year, The Indianapolis Star reported. Meanwhile, the price of ethanol has fallen from nearly $3 a gallon in June to nearly $1.50 in October. And some say the industry has overbuilt itself, glutting the market for now.

The problems have caused some ethanol producers to see shrinking profits and falling stock prices. Other companies have scrapped projects.

“There’s a little bit of a shakeout going on, but that’s to be expected,” said Mark Walters, director of biofuels programs for the Indiana Corn Marketing Council. “What it means is the industry is maturing. The euphoria is over.”

On Friday, Aventine Renewable Energy Holdings said it would slow construction of a plant in Mount Vernon, Ind. and delay the opening for about nine months. That plant had been scheduled to open early next year.

Company spokesman Les Nelson said the margins in the ethanol business today are nearly break-even.

“We need to make sure we have liquidity in our business,” Nelson said.