The 100-strong workforce at the Ensus biofuel plant at Wilton on Teesside will keep their jobs during the halt in production.
The company operates one of the world's largest cereal grain bio-refineries. It refines wheat to produce enough biofuel to meet one third of the UK's bio-ethanol demand.
It says the current high cost of wheat, because of a poor 2012 harvest, means it's not competitive to continue making ethanol at the moment. Ensus adds that while its manufacturing costs have risen, the price of ethanol hasn't gone up enough to make production worthwhile.
Ensus says it does not know how long the pause in production will be at the moment, but it hopes market conditions will improve so that it can make the Wilton plant operational again in the near future.