Thursday, September 13, 2001

Equity drive hits 14 million for soybean plant

The Minnesota Soybean Processors cooperative is inching ever closer to raising the money needed to build a soybean crushing facility in Brewster.

The 1,300-member co-op has banked roughly $14 million to date, said MnSP vice-president Ron Obermoller.

South Dakota Soybean Processors, the co-op's partner, recently gave the project a boost by putting up $1 million in retained earnings from its crush in Volga, S.D., for its members to invest in the Brewster project.

MnSP is nearing the end of its summer equity drive. Meetings are scheduled for 7 p.m. tonight at Worthington High School, 7 p.m. Monday at the American Legion in Fairmont, and 7 p.m. Sept. 20 at Minnesota West Community & Technical College in Pipestone.

Obermoller said he's confident the equity goal of $18.7 million will be met to allow the co-op to build an 80,000-bushel-a-day crush. Interest in the plant was high at the recent Farmfest and Dakotafest events, but many farmers were holding on to their checkbooks, he said.

"One of the things we're hearing at our meetings is that there's no reason to invest right now," Obermoller said.

However, he encouraged potential members to commit to the purchase of 2,500 equity shares - the amount needed to join the co-op - before the share price increases from $2.25 to $2.40 on Dec. 1.

The permitting process for the plant continues. Obermoller said the co-op expects to have permits for a 150,000-bushel-a-day crush, a soybean oil refinery and a biodiesel production facility by June 2002. Construction will begin immediately after, and the plant could be crushing soybeans by the fall of 2003.

"The plant will get built. We want as many local farmers to invest as possible," he said.

MnSP has signed a letter of intent with a Twin Cities equipment manufacturer for $8.5 million in processing equipment, which will save the co-op $450,000 year in fuel costs compared to older models, Obermoller said.

He also shared the results of a joint water exploration project between MnSP, Nobles County and the city of Brewster. The study found that there is enough water in the well field near Brewster to support the initial soybean crush, but more water will likely be needed if the plant expands or adds an oil refinery.

"They were surprised at how much water they found in the existing wells in Brewster," Obermoller said. "The water isn't the greatest quality, but there's a lot of it."

Obermoller said the outlook is good for the soybean crushing industry, thanks to a push in the Legislature for a state mandate on biodiesel.

The legislation requiring that the state's diesel supply contain a 2 percent biodiesel blend was introduced into the House and Senate last year and will be brought up again during the 2002 session. Biodiesel is an alternative to petroleum diesel and can be made from domestically produced soybean oil, vegetable oil or waste grease.

Last week, the Minnesota Soybean Research & Promotion Council released a poll conducted by the House during the 2001 Minnesota State Fair in which 4,677 people voted in favor of a biodiesel mandate, while 1,913 voted no.

The federal government is mandating sulfur reductions in diesel fuel by 2003, from the current 600 parts per million to 15 parts per million.

Obermoller said that a biodiesel mandate passes, MnSP will be in a prime position to take advantage of it.

"Minnesota's laws are being written for closed co-ops to be doing it, and that's exactly what we are," he said. "... Biodiesel may be bigger than what anybody envisions now."

Wednesday is investor's day at the South Dakota Soybean Processors plant, and MnSP is considering taking local producers to Volga to tour the plant, Obermoller said. Interested parties can call the MnSP office in Worthington at 343-6677.