THE CRUSH BEGINS
Cooperative fires up soybean processing plant and starts plans for biodiesel production

BY DAN LEMKE

Brewster, Minn. - Steam billowed into the cool December air as the Minnesota Soybean Processors cooperative fired up its newly-constructed soybean crushing plant. More than 2,300 farmers have invested over $30 million in the southwest Minnesota facility.

MnSP has an agreement with South Dakota Soybean Processors to manage the facility. After soybeans are crushed, the meal is sold primarily for livestock feed and the oil is sold for plastics, cooking oil and paints.

The co-op plans to expand the oil's use to fuel. In August, MnSP voted to construct a biodiesel processing facility alongside the crushing plant, off Highway 60 near Brewster.

"This is a major milestone," says Bob Kirchner, MnSP president and Nobles county farmer. The idea for the venture was sparked in a farmer discussion five years ago as a way to improve profits. "We not only brought a large project to reality, we also funded some infrastructure improvements we hadn't anticipated," including a gas feeder line into Brewster.

Kirchner says the plant should be running at its full 100,000 bushel per-day crushing capacity in the first half of 2004. MnSP began stockpiling newly-harvested soybeans in the fall, nearly filling its 2 million bushel storage capacity in anticipation of the November startup.

The cooperative is now pre-engineering the biodiesel plant and will soon move into the permitting process. Stock offerings were opened to co-op members in mid-November in an effort to raise $7.2 million in equity.

The target is to finance a plant that annually produces 30 million gallons of biodiesel. But it would be feasible to proceed at 8 million gallons minimum capacity.

"Even at 8 million gallons, it would trigger the (biodiesel) mandate," says Max Norris, AURI scientist in Marshall, referring to 2002 legislation. Beginning in 2005, all diesel fuel sold in Minnesota must contain a 2-percent biodiesel blend if the state has at least 8 million gallons of production.

Five years ago, AURI began working with the fledgling cooperative to assess the feasibility of a producer-owned plant. As potential emerged, AURI also funded market research. Norris and other AURI staff continue to provide technical assistance.

"We've seen the struggles they went through ... it's hard to build a plant, it's hard to raise money and it's hard to bring all the pieces together," Norris says. "But in the end, you're going to see value-added products come out that affect 2,300 farmers. That's what it's all about."

Kirchner adds proof of success "will come if we can send value-added checks back to our members."