Brewster, Minn. – For some southern Minnesota farmers, the soybeans they planted this spring could yield a bumper crop of biodiesel next year.

Just two years after helping to convince state legislators to pass a biodiesel mandate, the Minnesota Soybean Processors broke ground for a biodiesel refinery in March. The 30-million-gallon facility should be operational by early 2005. It is adjacent to MSP’s 100,000 bushel-per-day soybean crushing facility, which began operating in December 2003.

State law now requires that all diesel fuel sold in Minnesota contain at least 2-percent biodiesel by June 30, 2005 – if the state has at least 8 million gallons in production capacity.

"Minnesota uses 831 million gallons of diesel fuel each year," says Ron Jacobsen, Minnesota Soybean Growers Association president. "At 2 percent, that means a brand new market demand of over 16- million gallons of biodiesel."

The legislation helped MSP, owned by more than 2,000 producers, raise equity to construct the renewable-fuel refinery, which will easily surpass the mandate’s requirements. Minnesota will be the first state in the nation to have a biodiesel standard.

"This is a state that time and time again has put the mark of leadership out in front of everybody else on renewable fuels," says Minnesota Governor Tim Pawlenty. "Our agricultural economy and agricultural communities … are tremendously important to our state’s economy. One of the ways we can diversify our economic opportunities is to be aggressive on renewable fuels and other value-added agricultural initiatives."

A Minnesota Department of Agriculture study found that transportation demands for biodiesel will generate $212 million annually and create more than 1,000 jobs, primarily in rural Minnesota.

Soy co-op named AURI "Ag Innovator of the Year"

Minnesota Soybean Processors has been named the 2004 Ag Innovator of the Year by AURI’s board of directors. The award was presented at a June 17 luncheon.

The annual award recognizes a Minnesota business that has made a significant contribution to value-added agriculture with an innovative product or process, uses significant amounts of commodities, has achieved market success, and received AURI assistance.

Minnesota Soybean Processors operates a 100,000 bushel-a-day processing plant near Brewster and is constructing a biodiesel refinery to convert raw soybean oil into renewable fuel. More than 2,300 producers own the plant.

In selecting the Ag Innovator of the Year award, "it’s always interesting and encouraging to look at all the value-added activities going on in the state," says Edgar Olson, AURI executive director. "Minnesota Soybean Processors is an excellent example of what can be done when producers work together, recognize a market opportunity and then take the initiative to grasp that opportunity. That’s why we’ve chosen to honor them."

Minnesota Soybean Processors is the third recipient of the Ag Innovator of the Year Award. Pet Care Systems of Detroit Lakes received the award in 2002 and Mississippi Topsoils of Cold Spring was selected in 2003.

Energy Center launches first projects

Projects are developing under the new Center for Producer-Owned Energy, designed to help producers turn renewable agricultural products into power. While several projects are still at the proprietary stage and details can’t be divulged just yet, a few are highlighted here to show the Energy Center’s potential to positively impact Minnesota agriculture.

Biofuel and wind: A good marriage

Wind energy is one of Minnesota’s fastest-growing renewable-power sources. Massive blades pinwheel in the breeze converting wind to electrical energy in dozens of communities across northern, western and southern Minnesota. Power companies and producers work to harvest an invisible alternative crop.

But there are days when the wind doesn’t blow and other energy sources are needed to power the turbines. The Energy Center is sponsoring a project to use renewable sources such as biodiesel, biomass or biogas for extra power on calm days and during peak demand times.

"The peak energy demand is typically in July, August and January – times when wind velocities often lull," says Dennis Timmerman, AURI project development director. "If we are able to supply extra energy at those times by marrying the wind turbine to a biomass burner, turbine or diesel engine, we’ll have a completely renewable system that provides power at a time when it is at a premium."

The project, involving an energy company, will focus on economic feasibility and other factors related to combining wind electrical generation with another power source. It will also examine how cogeneration is affected by the economic climate, including public policy and renewable energy credits.

Ethanol: Let it flow, let it flow, let it flow

Minnesota’s 14 ethanol plants produce about 300 million gallons of the corn-based fuel each year. Through the ethanol-making process, those same plants generate thousands of tons of coproducts, such as distiller’s dry grains. Some is marketed as livestock feed, but the grains also contain higher-value components.

An Energy Center project with one of Minnesota’s producer-owned ethanol plants, is using a new technology to remove coproduct components that could be valuable in the marketplace.

"This project will be very exciting," says Alan Doering, AURI technical services specialist. "It will definitely impact the producers involved by creating high-value product made from raw materials that are typically lower valued."

Doering is also working with the ethanol plant to evaluate and perhaps change the physical form of the distiller’s grains. Due to their composition, distiller’s grains tend to pack tightly when shipped long distances in trucks or rail cars. Manipulating the form would allow the coproducts to be shipped greater distances to reach new markets, adding revenue to the plant’s bottom line.

Energy Center announces new programs

The Center for Producer-Owned Energy is now open for business.

Established earlier this year by AURI and a $1 million USDA grant, the Energy Center will help Minnesota producers develop renewable-energy related business ventures.

To meet that mission, the Energy Center is launching two programs: the Renewable Technology Assessment Program and the Green Field Energy Program.

Renewable Technology Assessment Program

This technical services program, available to existing producer-owned organizations, will evaluate the market and technical feasibility of technologies related to renewable energy and coproducts. The Energy Center will offer services on a cost-share basis through a network of specialized technical-assistance providers.

Eligible projects must develop a process or product that uses an agricultural commodity, is energy-related, and involves a legally-organized group of 10 or more producers who will share in economic returns.

Projects will be evaluated on the technology used, commodities consumed, number of producers impacted, value-added benefit, economic impact, cost savings and job creation or retention.

Green Field Energy Program<

The Green Field Energy Program will help establish producer-owned entities that don’t currently exist or were only recently organized. A network of specialized technical assistance providers, working in concert with the Energy Center, will provide core services on a cost-share basis. Eligible projects must have needs related to market feasibility and business development. The program is intended to assist projects where feasibility is yet to be determined.

Eligible applicants may be a steering committee or other group composed of at least five independent agricultural producers who are organizing a value-added business that will be owned and majority-controlled by producers.

The process or product must use an agricultural commodity, be related to renewable energy production or coproducts, and producers involved must participate in the project’s economic returns. Projects will be evaluated on the technology used, commodities consumed, number of producers impacted, value-added benefit, economic impact, cost savings and job creation or retention.

Core Services

Core services provided to qualifying organizations and projects under the Renewable Technology Assessment and Green Field Energy programs include:

Technical assistance: Projects that focus on new or improved process technologies or value-added energy products will receive product development assistance, pilot plant/laboratory services and engineering services.

Business assistance: The Energy Center will provide initial business assessment and evaluation. Through a network of cooperating organizations, the center will also provide market assessments, market development assistance and business planning.

Organizational outreach and development assistance: Services include cooperative development assistance and board training for producer-owned cooperatives.

For more information on the Center for Producer-Owned Energy and available programs, program guidelines can be downloaded directly from www.mncpoe.org.